Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

NORTH WALES HYDRO ELECTRIC POWER BILL

Lords amendments considered and agreed to.

Oral Answers to Questions — POSTS AND TELECOMMUNICATIONS

Sub-Post Offices

Mr. Edwin Wainwright: asked the Minister of Posts and Telecommunications how many sub-post offices have been closed down in the United Kingdom in each of the past five years.

The Minister of Posts and Telecommunications (Sir John Eden): With permission, I will circulate the information in the OFFICIAL REPORT.

Mr. Wainwright: Can the right hon. Gentleman say how many of these sub-post offices were closed because the remuneration to the sub-postmasters was insufficient? Will he bear in mind that sub-postmasters have to bear the heavy cost of lighting, heating, rates and rents? Can he take action to help sub-postmasters who have to obtain the services of another assistant when the amount of business transacted does not cover the amount of wages to be paid?

Sir J. Eden: I am well aware, and most appreciative of, the contribution of sub-postmasters. I tried to speak on this point in the Adjournment debate on 13th December. I have no doubt that the hon. Gentleman has studied the report of

that debate, from which he will see that the Post Office is trying to take fully into account all the extra duties which sub-postmasters are often called upon to fulfil.

Mr. Geoffrey Finsberg: Will my right hon. Friend confirm that this is a subject in which the Post Office Users National Council takes a continuing and active interest?

Sir J. Eden: Yes, Sir. I am well aware of the point which my hon. Friend makes. He will be aware that the Post Office also takes a continuing and active interest in this subject and watches carefully over the needs of consumers when determining policy in relation to sub-post offices.

Mr. Heffer: Is the right hon. Gentleman aware that in some of the larger cities the closure of sub-post offices and smaller post offices has been detrimental to old-age pensioners? Is he further aware that many pensioners who previously went round the corner to get their pensions now have to travel long distances? Will he consider this matter further and try to ensure that there are no further closures of sub-post offices affecting older people? Will he consider reopening some sub-post offices where there is a need to help old people?

Sir J. Eden: As the hon. Gentleman will know, this is a matter within the operational responsibility of the Post Office. I can assure him and the whole House that the Post Office is aware of the sort of problems to which he has referred and that it watches these matters closely.

Dr. Glyn: Is my right hon. Friend aware that this is a matter of great concern to a large number of small communities? Does he agree that a particular problem arises from the closure of sub-post offices in rural areas when people are unable to travel to the nearest town to obtain postal facilities? Will he make sure that this is one of the most economic ways of carrying out the Post Office function? Rather than decreasing the number of such offices, will he consider increasing them?

Sir J. Eden: I ask my hon. Friend to be good enough to look at the report of the Adjournment debate of 13th December, from which he will see that


there are many factors which the Post Office takes into account, including the position of elderly people in areas where there are closures and the difficulties experienced in rural areas concerning postal services. The fact remains, however, that there are many different factors which the Post Office must bear in mind when considering policy relating to sub-post offices.

Mr. Gregor Mackenzie: When the Minister discusses the matter, as I hope he will do with the Chairman of the Post Office Corporation, will he draw the chairman's attention not only to the substantial number of sub-post office closures but to the failure to open new sub-post offices on many new housing estates, including council estates? Does not the right hon. Gentleman agree that a considerable number of people are completely bereft of sub-post office facilities and that this situation is particularly difficult for old people on housing estates?

Sir J. Eden: I can assure the hon. Gentleman that this is a matter about which the Post Office is already fully aware and which it is watching most closely. The hon. Gentleman's point is very well taken. The Post Office must, however, balance economic factors against other matters. The overall position is that the provision of sub-post offices is more favourable in this country than in any other European country.

Following is the information:

1968–69
71


1969–70
100


1970–71
108


1971–72
127


1972–73
162

These are net figures. They exclude 48 sub-offices which were transferred to the Channel Islands postal authorities on 1st October 1969.

Television Licence Fee

Miss Fookes: asked the Minister of Posts and Telecommunications if he will take steps to alter the present television licensing system so that any person acquiring a colour set in place of a black and white one may continue to use the lower cost licence until its expiry.

Sir J. Eden: There would seem to be no justification for doing so.

Miss Fookes: Will my right hon. Friend explain why the Post Office finds it

administratively easy to collect extra money for a licence yet administratively impossible to refund part of the cost of a licence when people change from colour to black and white or give up television altogether?

Sir J. Eden: The first point that has to be borne in mind is the statutory position. It is a matter of law, not of cost or operational convenience, that a colour licence is needed for colour reception. That is the point to which my hon. Friend's Questions was directed.

Mr. Russell Kerr: Not a very good answer.

Telephone Exchange Equipment

Mr. Golding: asked the Minister of Posts and Telecommunications if he will list the approved suppliers of telephone main exchange equipment to the Post Office.

Sir J. Eden: General Electric Co., Plessey Telecommunications. Standard Telephones and Cable, and Pye/Telephone Manufacturing Company.

Mr. Golding: Will the right hon. Gentleman assure us that Pye TMC will be included in the discussions which will take place on the future of System X telephone exchanges? When are the manufacturers likely to come together to discuss that development?

Sir J. Eden: As the hon. Gentleman will recognise, this is a complicated matter involving the sharing of commercially valuable information among manufacturers. It is for the industry to negotiate satisfactory arrangements which will enable Pye TMC to participate.

Mr. Kaufman: Could the right hon. Gentleman have a sharp word with Plessey, which, I understand, supplies the telephone equipment allegedly connecting this House with the outside world, and inform it that never have so many attempted telephone calls been connected to so few respondents? Will he try to do something about this?

Sir J. Eden: That does not arise on this Question.

Programme Content

Mr. Hugh Jenkins: asked the Minister of Posts and Telecommunications


whether he will now answer Questions relating to programme content.

Sir J. Eden: As the House knows, the broadcasting authorities are responsible for programmes and their content.

Mr. Jenkins: Is the right hon. Gentleman aware that, under the curious rules we frame for ourselves, it is necessary to ask the Question in this form even if most of us do not want him to interfere in particular programmes? Is he further aware that many of us feel he has a duty to see that the authorities maintain their task in keeping a proper balance and that there are those of us who feel that the balance has not been kept by the broadcasting authorities? Will he keep a firm eye on the authorities to see that they carry out the duties which he quite rightly says are theirs?

Sir J. Eden: If there were a general consensus in the House that the governing authorities of the broadcasting bodies were not carrying out the responsibility placed on them, that would be a grave matter which would involve the Minister of the day.

Mr. Gorst: Even though my right hon. Friend will not consider answering Questions about programme content, will he nevertheless—when it comes to a consideration of the virtual collapse of London Broadcasting and any reorganisation which he might deem desirable or necessary—bear in mind that there would be great disapproval in this House if he were to make any arrangements permitting a London newspaper which so far is not represented on the board of that company to take over control or even greatly to influence its programmes?

Sir J. Eden: There are later Questions dealing with this subject.

Christmas Mail

Mr. Rost: asked the Minister of Posts and Telecommunications whether he is satisfied with the current position with regard to the delivery of Christmas mail.

Sir J. Eden: My hon. Friend will be aware that the Post Office has had to restrict parcel services because of the disruption on the railways, but I am satisfied that it is doing all it can to get the rest of the Christmas mail through in increasingly difficult circumstances.

Mr. Rost: If, as happened last year, Christmas is spoiled for a large section of the community because of the late delivery of Christmas mail and parcels, will the right hon. Gentleman make sure that the public are made aware of the cause of this inconvenience and know that it is not due to the Post Office or to Post Office workers, who are doing everything possible in difficult circumstances to get the mail delivered? Will the blame please be put on to the ASLEF train drivers?

Sir J. Eden: I am satisfied that everyone in the Post Office has done his level best to ensure that there is not a repetition of the situation experienced last year. Unfortunately, other circumstances have arisen this year, primarily as a result of the disruption to rail services. This is bound to have a direct effect on the movement of mail over Christmas.

Mr. Driberg: When was the decision about parcels taken and why was it announced only very late apparently on Saturday night in a confusing form, so that it could reach only the later editions of the Sunday papers? Will the right hon. Gentleman clarify what is being refused and where?

Sir J. Eden: I have to ask for the indulgence of the hon. Gentleman. The Post Office naturally has to watch this situation not only day by day but literally hour by hour. It is most anxious to avoid taking any decision which would lead to interruption in the movement of mail over Christmas. It is holding off taking final decisions for as long as possible. The Post Office gave a lot of prior warning about the likelihood of its being forced into taking such a decision as it has had to take over the weekend. It naturally regrets it very much indeed, but it needed a breathing space if it was to have the slightest chance of catching up on the vast backlog which had accumulated as a result of the disruption of rail services.

Sir E. Bullus: Does not my right hon. Friend agree that it would be right to drop the 3½p postal rate, since there is no priority for it, and revert to the 3p stamp for letters?

Sir J. Eden: I do not think that would help in the present state of confusion.

Mr. Charles R. Morris: Bearing in mind the splendid job being done by Britain's postal workers in clearing the Christmas mail this year, may I ask the right hon. Gentleman whether he will now endorse the action taken by the Chairman and members of the Post Office Board in supporting the application by the staff of the Post Office to have its pay considered as an anomaly by the Pay Board?

Sir J. Eden: That is another matter, which does not arise on this Question.

Mr. Ewing: Can the right hon. Gentleman say whether he was consulted before the Post Office took the decision to stop accepting parcels for London and the Home Counties? Can he also explain why, if an item which previously would have been posted as a parcel comes within the size and weight limits, it can now be posted at letter rate? How does this relieve the position?

Sir J. Eden: The hon. Gentleman knows that the Minister is not responsible for the day-to-day operation of the Post Office. The public were urged in advertisements in the national Press as early as 9th December to post parcels immediately.

Mr. Gregor Mackenzie: With respect, that does not answer my hon. Friend's question. Why can a parcel now be sent by letter post, at a very much greater cost to the sender, when it cannot be sent as a parcel? Maybe some people at the Post Office over-reacted.

Sir J. Eden: There are special trains operating all these services. Letter post and Christmas cards are being given priority at the moment. The situation at the weekend arose as a result of the failure of some essential trains to run. This caused a great backlog of parcels.

Postal Rates (Pensioners)

Mr. David Steel: asked the Minister of Posts and Telecommunications if he will estimate how much it would cost to grant a concessionary penny postal rate to all retirement pensioners.

Sir J. Eden: This would be a matter for the Post Office, but it would be impossible to ensure that only pensioners' correspondence was sent at the concessionary rate.

Mr. Steel: While I accept there would be great administrative difficulty in any such suggestion, may I ask the right hon. Gentleman to consider such a scheme over the Christmas period?

Sir J. Eden: I do not see how on earth one could tell whether an old-age pensioner had written the letter.

Mr. Molloy: Will the right hon. Gentleman consider supplying old-age pensioners with a few pre-paid envelopes—there would be no great administrative difficulty about that—which they could get when drawing their pensions? Is not this a reasonable suggestion which could be implemented almost overnight?

Sir J. Eden: That is a matter which the hon. Gentleman should address to the Post Office Corporation.

London Broadcasting Company

Mr. Whitehead: asked the Minister of Posts and Telecommunications what representations he has received from the Independent Broadcasting Authority regarding the financial affairs of the London Broadcasting Company.

Mr. Gorst: asked the Minister of Posts and Telecommunications what requests he has received from the IBA for a variation of any of the undertakings given by the Government regarding the commercial radio all-news station in London on 12th April 1972; and what reply he has given.

Mr. Kaufman: asked the Minister of Posts and Telecommunications when he last discussed the question of the London Broadcasting Company with the Chairman of the Independent Broadcasting Authority.

Sir J. Eden: I have received no representations from the Independent Broadcasting Authority about the London Broadcasting Company, nor have I discussed this matter with the chairman, since nothing has arisen which calls for Government intervention.

Mr. Whitehead: Is the right hon. Gentleman aware that there is a major financial crisis in the London Broadcasting Company and that the National Union of Journalists has already asked the Independent Broadcasting Authority for an inquiry? As the IBA will


not contact him, will the right hon. Gentleman contact the IBA and say that, while it is obviously true that the company must have time to find its feet, its feet will be kicked from under it by any one or more of three or four major threats—mass redundancies, which are now being threatened, a cut-back in the reporting standards to a rolling news programme, a shift in ownership or newspaper control? Will the Minister ensure that that does not happen and that in return the IBA will allow LBC to get the money it should have from Capital Radio for the new service which it provides?

Sir J. Eden: The union situation is a matter for direct negotiation between the unions and the employers concerned. I am satisfied that the IBA is watching the situation closely.

Mr. Gorst: Does my right hon. Friend recall that in the debate on 12th April the Government gave an assurance that, if the standard of news on the station was not adequate, it would be permissible for other stations not to take its news services? Can he give an assurance that none of the stations either contemplated or already in existence need continue to take this inadequate service? Secondly, will my right hon. Friend give an assurance that there will be no question—as was also repeated in the debate—that anyone else will have to bear the cost of subsidising this station, whether it be other contractors, the Treasury or the IBA itself, from a loan?

Sir J. Eden: It is still much too early to apply blanket condemnation. This station is experimenting with a format completely new to British radio, and we must give it every encouragement to develop.

Mr. Kaufman: Will the right hon. Gentleman give a categorical assurance that, no matter what the pressure or cajoling, he will not permit this station to be turned into anything other than the news and information service it is required to be and that, if the choice is between turning it into a news plus pop station and allowing it to go under, he will allow it to sink unmourned beneath the waves?

Sir J. Eden: If the company wanted to make any major changes in format, it

would have to discuss its proposals with the IBA, and the Chairman of the IBA would have to put them to the Minister.

Mr. Geoffrey Finsberg: Will my right hon. Friend remain quite firm on this and accept that the public like this station and do not agree that he should contemplate its sinking beneath the waves?

Sir J. Eden: I can confirm that I have had many letters of appreciation from listeners who value the contact that is given to them with the outside world and with sources of information as a result of the broadcasts put out by LBC.

Mr. John Grant: Will the right hon. Gentleman take care in this matter not to show the same remarkable complacency as seems to characterise the IBA's handling of it? Does he not think that the anxiety shown on both sides of the House justifies an independent inquiry into the whole unfortunate affair? Does it not underline his need to sweep away the secrecy which surrounds the way in which franchises are awarded by the IBA, so that we can see what sort of criteria the IBA is using in these matters?

Sir J. Eden: The awarding of franchises is the responsibility of the IBA, not of the Minister, as the hon. Gentleman well knows, and that is the way it should be. There is no complacency whatever on anyone's part. One should not conduct a campaign against something which has only recently been launched, which is still going through fairly early difficulties and troubles but which none the less offers fairly good prospects for a bright future.

Television Licences (Pensioners)

Mr. Radice: asked the Minister of Posts and Telecommunications how much money has been spent in the past year on granting concessionary television licences to retirement pensioners.

Sir J. Eden: Retirement pensioners as such do not receive concessionary television licences. About 190,000 people have old persons' home television licences; the value of this concession amounted to about £1 million.

Mr. Radice: Would not the right hon. Gentleman agree that, in the new situation created by the present crisis, one of the least costly gestures of good will that the Government could make would be to


give all old-age pensioners cheap television licences? Is he aware that most old-age pensioners would regard a change of heart on television licences as a real Christmas present, better than the one they are getting at the moment?

Sir J. Eden: I do not know whether the hon. Gentleman has had the opportunity to study the figures rehearsed in this House on a number of occasions, but to give all retirement pensioners a free television licence would cost £30 million a year. I do not think that can be contemplated.

Fourth Television Channel

Mr. Wyn Roberts: asked the Minister of Posts and Telecommunications when he expects to make a statement about the fourth channel.

Sir J. Eden: Next spring.

Mr. Roberts: Will my right hon. Friend confirm that the Independent Broadcasting Authority is the only organisation which can provide an additional service without an extra direct charge to the viewer? Will he also confirm that some of the existing contractors have a great deal of spare studio capacity?

Sir J. Eden: I bear the last point in mind. It was one of the aspects of the representations made to me by the independent television companies. If the decision were taken to assign the fourth television channel, one could only avoid making a charge on the consumers' part by having an alternative source of revenue—for example, from additional advertising.

Mr. Whitehead: As the Government are now about to preside over a major recession, and since the first casualty of any recession is always television programme expenditure, is not this the time to say to the ITV companies once and for all that we do not need a fourth channel and we do not need ITV2?

Sir J. Eden: That is a point of view.

Mr. Marten: Before the channel comes into operation, will my right hon. Friend look at the question of censorship? Has he seen the letter in The Times from Mr. Woodrow Wyatt saying that one of his programmes was gravely censored, which is scandalous?

Sir J. Eden: That is a matter for the authority and not for the Minister.

Mr. John Grant: Even at this late stage, could not the right hon. Gentleman consider possibly extending the terms of reference of the Crawford Committee, so that it can look at regional possibilities for the fourth channel? That committee and its witnesses are suffering some difficulty because of the inhibitions placed upon them in that they cannot discuss the fourth channel properly.

Sir J. Eden: The terms of reference have been set, as the hon. Gentleman knows. In so far as it might regard the prospect of using the fourth channel as applicable to particular regional situations, I have no doubt that the committee would find it possible to comment on that aspect.

Mr. Robert Cooke: The Government are rightly spending many millions of pounds more on the arts. Will my right hon. Friend bear in mind that the fourth channel could bring the subsidised arts to a far wider audience?

Sir J. Eden: That is one of the more interesting propositions submitted to me as justifying the application of the fourth channel at present. I agree with what my hon. Friend has said.

Broadcasting Coverage

Mr. Brocklebank-Fowler: asked the Minister of Posts and Telecommunications what instructions he has given to Sir Stewart Crawford regarding the priority he should give to reporting on local area coverage as distinct from the other problems his committee is investigating.

Sir J. Eden: None. It is for the committee to decide what priority to give to the various problems it has been asked to consider.

Mr. Brocklebank-Fowler: Can my right hon. Friend tell the House when he expects the committee to report on that part of the overall investigation? Will he undertake that the IBA will grant no new contracts to programme companies until the report has been received by him and action has been taken by the Government?

Sir J. Eden: I hope that the committee will report early next year. However,


I cannot undertake to bind the IBA in any matter for which it has direct responsibility.

Public Telephones (Deaf Persons)

Mr. Pavitt: asked the Minister of Posts and Telecommunications if he will issue a general direction to the Post Office to install amplified telephones for the use of those suffering from partial deafness in selected Crown post offices and some public places where the technical problems can be surmounted.

Sir J. Eden: No, Sir. The Post Office is fully aware of the needs of the hard of hearing and is already conducting trials of suitably modified coinbox equipment.

Mr. Pavitt: Is the Minister aware that I am most grateful for the conversations I have had with senior technicians in the Post Office, who have assured me that the subject of my Question is a possibility in the very near future? Will he exert pressure to make such that the near future comes very shortly, and see at the same time that the research into induction coil and loop reception is exploited so that when the new behind-the-ear aids become available this will be available in telephones, too?

Sir J. Eden: I am glad for what the hon. Gentleman said. The Post Office has agreed to proceed with trials at selected sites throughout the country as soon as possible.

Radio Services (Northumberland)

Mr. Beith: asked the Minister of Posts and Telecommunications what he estimates to be the number of people in North Northumberland who are unable to receive local news and weather forecasts on BBC North-East Radio 4 VHF; and whether he has considered any proposals for extending the range of this service.

Sir J. Eden: Approximately 23,000, according to the BBC's latest estimates. I shall consider any proposals put to me by Sir Stewart Crawford's Committee, which is considering this and other problems of broadcasting coverage.

Mr. Beith: Will the Minister, who did not await the report of the Crawford Committee before taking away the

medium wave frequency, initiate discussions with the IBA and BBC to see whether urgent facilities can be provided at the Chatton television transmitter? Is he aware that the news was broadcast on medium wave by mistake on 4th December? Will he tolerate that mistake being continued temporarily until a permanent arrangement can be made?

Sir J. Eden: Decisions affecting the medium wave were taken some time ago and were not affected by the appointment of the Crawford Committee. I think the hon. Gentleman will agree that, having appointed the committee, I would be well advised to await its findings.

Post Office Vacancies

Mr. Wellbeloved: asked the Minister of Posts and Telecommunications whether he will make a statement indicating the number of vacancies in all grades of the Post Office at the present date.

Mr. Charles R. Morris: asked the Minister of Posts and Telecommunications whether he will make a statement indicating the number of vacancies in the postman, telephonist, telegraphist and postal officer grades of the Post Office at the present date.

Sir J. Eden: The Post Office tells me that the latest figures are: postmen 9,300; telephonists 3,100; telegraphists 150; postal officers 1,100 and clerical staff 1,100.

Mr. Wellbeloved: Does the right hon. Gentleman accept that those figures give no reason to be satisfied with the state of recruitment in the Post Office? Is he aware that the present situation is due to the fall in morale in the Post Office, and that Post Office workers look to him as the Minister responsible to support the Post Office Board in making representations to the Pay Board for justice for all grades in the Post Office?

Sir J. Eden: I agree with the first part of the hon. Gentleman's question but not with the second and third.

Mr. Kenneth Lewis: Can my right hon. Friend say what are the percentages involved and whether there are a larger number of posts vacant in the South-East of England than in the rest of the country, which is the normal situation?

Sir J. Eden: I cannot give my hon. Friend the geographical distribution, but the total national position is as follows: postmen 9·5 per cent., telephonists 7·5 per cent., telegraphists 9 per cent., postal officers 4·8 per cent. and clerical staff 3·8 per cent.

Mr. Ewing: Does the Minister agree that the shortfall of 15,000 staff in the Post Office is very serious? What does he propose to do to relieve the situation? Does he propose to support the Chairman of the Post Office Board in the application to the Pay Board? Is he aware that there is another serious problem inasmuch as staff turnover is now much higher than ever?

Sir J. Eden: The question of wages and remuneration of staff is, first, under negotiation between the unions concerned and their employer. Secondly, there is the question of the relativities report. Thirdly, there is ample scope within the flexibility provided under stage 3. Fourthly, I have no doubt that the future of the Post Office will improve as more and more people come to recognise the valuable service that can be given in its employment.

Mr. Golding: Is the Minister aware that that answer will be received with a sneer by Post Office staff? Is he aware that the international telephone service is in dire difficulties? The fault rate is very high because of the shortage of telephonists. Will the right hon. Gentleman impress upon the Government the need to deal with the wages question as quickly as they can?

Sir J. Eden: Yes, Sir. The particular position affecting certain aspects of the telephone side involves other factors which are certainly of concern in the present situation. The Post Office is very well aware of this. It is doing its best to overcome the manpower shortages in every possible respect, and the question of wages is under direct negotiation.

Mr. Gregor Mackenzie: No matter how dedicated the staff of the Post Office may be to their task in life—and they are—we should all like to hear, and the employees of the Post Office would like to hear, that the Minister will stand up for them on the question of wages. Otherwise we shall have no people working in the service at all.

Sir J. Eden: With great respect to the hon. Gentleman, he must recognise that the scope for negotiation is set down by the terms of stage 3. I cannot depart from it, nor can anybody else. It is the law of the land. There is ample scope for negotiation within it.

Television Licences (Hotels and Businesses)

Mr. Ashton: asked the Minister of Posts and Telecommunications whether he will introduce legislation to bring in a specific television licence for sets used by hotels and business premises.

Sir J. Eden: There already are some such licences. If the hon. Gentleman has any problem about them I shall be pleased to do my best to try to resolve it.

Mr. Ashton: But why should the Savoy, with 450 television sets, pay for only one licence? Why do we have a situation, under the 1949 and 1970 Wireless Telegraphy Acts, in which the Grosvenor with 200 sets, Claridge's with 200 sets, the Churchill with 100 sets, the Inn on the Park with 100 sets and the Dorchester with 50 sets each pays only one television licence for the lot, when we are telling old-age pensioners that they cannot have a cheap or free television licence? Will the Minister do something to stop this racket? Will he charge the people who are staying at those places on expense accounts with the full cost of the television, and give the concession to the pensioners?

Sir J. Eden: There are various forms of multiple licences. Their purpose is to reduce the amount of paper work which individual licences would entail. The full information about multiple licences is given in Statutory Instrument 1970 No. 548.

Mr. Fernyhough: Does not the Minister realise that the meaning of what my hon. Friend the Member for Bassetlaw (Mr. Ashton) has told us is that he has extended to the wealthy patrons of very prosperous hotels the same facilities that he has extended to pensioners living under warden supervision? Is not that completely wrong? When we are to have announcements such as are to be made later this afternoon, how can the right hon. Gentleman justify the fact that people who are in a position to rent


suites in those hotels are having television for almost nothing?

Sir J. Eden: This has been a longstanding and very practical arrangement. The fees for hotels and business premises are the same as for domestic premises. The guidelines affecting multiple licences are clearly laid down.

Mr. Jeffrey Archer: Does my right hon. Friend realise that many of us on this side of the House still think that it is grossly unfair that pensioners in groups and pensioners individually pay a different sum for their licence and that we would like to see the situation resolved once and for all?

Sir J. Eden: As my hon. Friend well knows, the matter has been considered many times before and has been debated in the House. The difficulty has been to try to define a system which is administratively simple and cheap to operate and which does not produce new anomalies greater than those which already exist.

Electricity Saving

Mr. Dalyell: asked the Minister of Posts and Telecommunications what new instructions he has given to members of his Department for the saving of electricity.

Sir J. Eden: All staff in my Department are being instructed to apply strictly the restrictions on the use of electricity recently announced by my right hon. Friend the Prime Minister.

Mr. Dalyell: As it is all too easy to criticise the public service, will the Minister make clear what is the truth, namely, that the public services, including the Post Office, probably do more than their share and not less than their share in the current situation?

Sir J. Eden: Yes, Sir. I accept and agree with what the hon. Gentleman says.

Oral Answers to Questions — CIVIL SERVICE

Scientists (Pay)

Mr. Evelyn King: asked the Minister for the Civil Service by how much average earnings in the United Kingdom have risen since the General Election;

and by how much salaries of Government employed science graduates in technical employment and salaries of graduate scientists in the Atomic Energy Authority have risen in the same period.

The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker): Average earnings rose by 47 per cent. between June 1970 and September 1973. During this period a science graduate entrant to the scientific officer grade received pay increases of 11 per cent. in January 1971, 7½ per cent. in January 1972 and 7 per cent. in April 1973. The problem over scientists' pay is that they did not agree to a substantial pay research review in January 1973 since they were dissatisfied with the basis of comparison, and we have now asked the Pay Board for its advice on the criteria for determining scientists' pay.

Mr. King: Does not that reply reveal a disturbing position—an 11 per cent. or 7 per cent. rise as against a 40 per cent. rise? Does it not reveal an unacceptable disparity? When entering the Government service, did not scientists think that they would be treated on a par with others? That has not been so.

Mr. Baker: My hon. Friend cannot have heard me correctly, because the figures are better than that, but I fully acknowledge the importance of scientists in the Civil Service and I am sorry that this disagreement has stretched out for so long and that scientists have not come within the anomalies review. But I assure my hon. Friend that we are deeply concerned about this dispute and we hope that the Pay Board will report soon.

Mr. Swain: Is the hon. Gentleman aware that one of the items in the Prime Minister's platform for the General Election was that he would seriously examine and cut back the number of civil servants? Can the hon. Gentleman now tell the House what number has been cut back and what additional numbers have had to be taken on to administer the vicious Housing Finance Act and the Industrial Relations Act?

Mr. Baker: That question is rather wide, but I have answered similar questions on this subject frequently and the last figures I gave, on 1st October 1973,


showed that, taking industrials and non-industrials together, there had been a fall in the total number of civil servants since we came to office.

Mr. Maclennan: Is the hon. Gentleman aware that scientists in the pay of the Atomic Energy Authority are extremely angry about the Government's policy and that the Government's excuse about the Pay Research Unit is wholly unacceptable to them, as was made clear more than two years ago? Is he aware that the fact that the Pay Board will not be in a position to make its announcement until the middle of January—apparently at the earliest—is regarded as yet another breach of faith? What are the Government doing to accelerate a settlement of this dispute?

Mr. Baker: The hon. Gentleman is being somewhat unfair. I am as concerned as the IPCS about this subject. We want to agree a new basis for determining relativities for scientists' pay and that is what we have asked the Pay Board to do.

Mr. Wingfield Digby: Are not scientists in atomic research establishments of great importance at present when we are talking about increasing nuclear energy?

Mr. Baker: I could not agree more, but I wish to reassert that we are as concerned as other hon. Members about the fact that the dispute should have dragged on for so long. We are keen to agree a new way of determining the relativities for scientists' pay.

Mr. Sheldon: Is that enough, given the present situation? Is it not a fact that what happens in determining the pay of scientists is that the Pay Research Unit makes comparisons with the pay of outside scientists; but as the Government are the predominant employer of scientists, this kind of comparison has less validity, so that the Government scientists have fallen sharply behind as a result and something has to be done outside that framework?

Mr. Baker: I take the point. Scientists have said that a comparison with outside employment was not suitable for them though suitable for the rest of the Civil Service. That is why we have jointly referred the matter to the Pay Board, and I hope that it will report soon.

Secretaries and Typists (Pay)

Mr. Pardoe: asked the Minister for the Civil Service by what percentage the average wages of secretaries and typists employed in the Civil Service in London have increased since 1st January 1972.

Mr. Kenneth Baker: The average wages of all secretaries and typists have been increased by 19 per cent. since 1st January 1972, including the increase on that date. I am glad to say that a settlement has just been reached which, if the Pay Board approves, will give an average increase of about 8½ per cent. from 7th November 1973. There will be a stage 3 increase on 1st January 1974.

Mr. Pardoe: While this may not be the best day to ask for an increase for anyone, does not that reply mean that the allowance to a Member in respect of his secretary should have risen by about £160 since January 1972? Will the hon. Gentleman discuss the matter with his right hon. Friend the Lord President of the Council?

Mr. Baker: There are Questions later today to my right hon. Friend on the subject of allowances for Members for secretarial services. I am responsible for Civil Service secretaries, and the figures I have given show that their salaries have risen reasonably well over the past 18 months.

Mr. Pavitt: As the hon. Gentleman has one of the few Departments able to breach the principle "For them that hath may more be given", will he consider the subject of differentials so that block increases given to secretaries are not extended to men with £10,000, so that differentials are based on the strategy for other sectors of the Pay Code?

Mr. Baker: We did that in the past when we shifted increases further down so as to give the lower-paid, such as junior typists and secretaries, a greater amount than was available to those earning, say, £4,000 or £5,000 a year.

Mr. Biffen: Have the Pay Board and the Price Commission been able to fulfil their clerical functions at these rates of pay, or have they been obliged to use outside agencies?

Mr. Baker: To some extent they have been obliged—as have all employers in


London, both public and private—to use secretarial agencies. [Interruption.] It is not entirely a matter of pay. Many girls who become secretaries and typists want a life style different from the past. I do not speak from personal experience. They want much longer holidays, and when they work they want to work for very much longer hours. That is one of the reasons why secretaries and typists in London find that agency work gives them the sort of things they want—independence and longer holidays as well as more pay.

Electricity Saving

Mr. Dalyell: asked the Minister for the Civil Service what new instruction he has given to members of his Department for the saving of electricity.

Mr. Kenneth Baker: My Department has instructed all Government Departments, including the Civil Service Department, to apply strictly the restrictions on the use of electricity announced by my right hon. Friend the Prime Minister. All staff are being instructed accordingly.

Mr. Dalyell: Can the Minister assure us that the life style of civil servants in relation to matters of electricity is not different from that of the rest of us?

Mr. Baker: I can assure the hon. Gentleman that civil servants will not receive any special treatment, either up to 30th December or in the régime that operates in the New Year. I should like to emphasise that civil servants will work with electricity for three days and for the remaining days offices will have to stop when it gets too dark or when they cannot continue their work. As there is some feeling that there will be special exemptions for the Civil Service, I should like to emphasise that there will be few exemptions and that such exemptions as are made will be made entirely for essential public work or for services to the public and not for the convenience of civil servants.

Mr. Sheldon: That was a serious statement. Does the Minister mean that those offices that have no natural light facilities will find themselves having to stop work early as the result of fading light? How does that apply to the Department of Employment, which will be particularly concerned with its problems, and the

Pay Board, which may be similarly placed? Will not the hon. Gentleman give them exemptions? On the general question, what does he intend to do about the minimum heating regulations that are laid down for the service?

Mr. Baker: The heating question is covered by the order which is already in force. Heating which is oil-fired, coal-fired or gas-fired will be permissible up to a certain temperature. Heating fired by electricity will not be permitted at all. I emphasise that working hours in the Civil Service will not be treated any differently from those of clerical workers in industry.

Oral Answers to Questions — HOUSE OF COMMONS

Private Business Procedure

Mr. Geoffrey Finsberg: asked the Lord President of the Council what is his policy towards the setting up of a Select or Joint Committee on private business procedure.

The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): I believe that an inquiry into this subject is probably due, but I am not sure that it would be appropriate to undertake such a commitment this Session. If such an inquiry were set up, the Government's view is that it might be appropriate that it should be undertaken by a Joint Committee of both Houses.

Mr. Finsberg: I am grateful to my right hon. Friend for that answer. Does he appreciate that the present system is hopelessly antiquated and bears heavily on people who have to make objections to Private Bills? If the Government are unable to announce the appointment of a Joint or Select Committee, will they refer the matter forthwith to the Procedure Committee?

Mr. Prior: On the last part of my hon. Friend's supplementary question, this matter would not be within the normal terms of reference of the Procedure Committee. But, as I have said, a joint review of this matter might be useful. I agree with what my hon. Friend said in the earlier part of his supplementary question.

Mr. Wellbeloved: Does the right hon. Gentleman agree that it is essential that


Parliament should retain the right of full scrutiny of all private measures? Does he also agree that one area of private business which is well overdue for review is the fees that are charged, which I understand have not been reviewed for the past 50 to 60 years?

Mr. Prior: I will consider the latter part of what the hon. Gentleman has said. On the first part, scrutiny, yes; obstruction, no.

Mr. Maxwell-Hyslop: If my right hon. Friend refers this matter to a Joint Committee of the two Houses, will he include in the terms of reference the matter of reporting on the circumstances in which Ministers should or should not intervene in proceedings on Private Bills in this House?

Mr. Prior: Yes, Sir. I should be quite happy for that to be part of the terms of reference and, in view of what my hon. Friend has said to me on previous occasions, I should ensure that it was.

Secretaries

Mr. David Steel: asked the Lord President of the Council what representations have been received from the Secretaries' Council about the pay and conditions of work within the Palace of Westminster; and if he will make a statement.

Mr. Prior: I have received several communications from the Secretaries' Council raising a wide range of subjects, and I have also received a communication informing me that a substantial number of Members' secretaries do not wish to be associated with its representations, especially as regards terms of employment.

Mr. Steel: Does the right hon. Gentleman agree that it would be appropriate for the Compton Inquiry to take this question under its wing?

Mr. Prior: I think that, on the whole, it would be better for the Compton Inquiry not to take this matter within its terms of reference. It is one which Members must decide for themselves and, if necessary. refer to the Boyle Committee.

Ashworth's Secretarial Bureau

Mr. Evelyn King: asked the Lord President of the Council who is respon

sible for the appointment of Ashworth's Secretarial Bureau and the conditions under which it works, and for the appointment of its successor.

Mr. Prior: A contract with the bureau is entered into by the Serjeant at Arms, acting under the direction of Mr. Speaker, who is advised by the Services Committee in these matters. In the past the outgoing owners have made arrangements for the transfer of business, but this has not been done on this occasion. Inquiries are therefore being pursued under the aegis of the Services Committee with assistance from the Civil Service Department.

Mr. King: The bureau has rendered invaluable service to hon. Members for more years than any Member can remember. Is my right hon. Friend taking energetic steps to ensure that a successor is appointed, because it would be wrong if no such service was available to the Palace of Westminster? If it is necessary, as it may well be, to improve the conditions, will my right hon. Friend ensure that they are improved?

Mr. Prior: I agree with my hon. Friend. The Services Committee is doing all it can to ensure that a successor is appointed, but it is not proving all that easy. There is a general shortage of secretarial staff in the London area and agencies are understandably cautious about taking on new commitments. However, I am hopeful.

Mr. Ford: Does the right hon. Gentleman agree that the Ashworth's situation makes it even more urgent and important for hon. Members to be properly remunerated to enable them to employ adequate secretarial assistance? Will the right hon. Gentleman hurry his investigations into this matter?

Mr. Prior: A large number of people think that there is never an appropriate time to improve Members' secretarial or other allowances. But I am certain that today of all days is not the best day to consider the matter.

Dame Irene Ward: Will my right hon. Friend bear in mind that, quite rightly, the House of Commons has spent I do not know how much money on providing accommodation for private Members' secretaries, with which we all agree,


whereas the conditions for Ashworth's are such that it is no longer able to continue its service, which I very much regret? I am very annoyed about it.

Mr. Prior: I hate my hon. Friend to be annoyed about anything, and I will do my best to ensure that the successor to the present agency, if we are lucky enough to obtain one, receives the assistance which it requires.

Bicycles

Mr. Bruce-Gardyne: asked the Lord President of the Council if he will take steps to extend the provision for the bicycles of hon. Members in the Palace of Westminster.

Mr. Prior: Yes, Sir; there are already plans in hand to do this.

Mr. Bruce-Gardyne: I thank my right hon. Friend for that most encouraging reply. Is he aware that today five bicycles, presumably belonging to hon. Members, were crushed into three bunks, one of them ostensibly reserved for my right hon. Friend the Member for Harrogate (Mr. Ramsden)—not that I begrudge him that? Is it not a reasonable expectation that a great many right hon. and hon. Members will be following the example of those of us who discovered years ago that a bicycle is much the most efficient way of getting around London? Will he reserve a portion of the new car park—say, half—for the use of bicycles?

Mr. Prior: It may be a reasonable expectation, but I shall be very surprised if it is fulfilled.

New Palace Yard

Mr. Lipton: asked the Lord President of the Council if he will make a statement on the situation regarding plans for the resurfacing of New Palace Yard.

Mr. Prior: The Services Committee is taking further advice and will report to the House in due course.

Mr. Lipton: Is the right hon. Gentleman aware that the Government have got into a terrible mess over this matter? Would it not be better to have a moratorium and leave the surface of New Palace Yard alone for the time being until wiser counsels prevail?

Mr. Prior: No, Sir. It is not the Government who have got into a mess; it is the surface of New Palace Yard.

European Assembly (Members' Expenses)

Mr. Arthur Lewis: asked the Lord President of the Council whether he is aware that Members attending the European Assembly are paid, in addition to their £25 a day attendance allowance, a £10 travel allowance in excess of their actual costs incurred; and whether he will propose that all Members should be paid on this basis.

Mr. Prior: The rates of travel allowances for attendance at the European Assembly are a matter for that Assembly. I understand, however, that this allowance is based on the distance travelled.

Mr. Lewis: Will the right hon. Gentleman investigate a report in the Observer yesterday that a group of City financiers and bankers were addressed by the Secretary of State for Defence in order to raise money from the banking houses in the City to pay the expenses of Tory Ministers and Tory back-benchers who go to the European Assembly? If that is true—and the report says that Government facilities were provided—many of us on this side of the House think it disgraceful that City financiers should have been called together and asked to pay the expenses of a selected few Members who are getting per day, tax free, more than the miners get in a week.

Mr. Prior: It would be much more appropriate if hon. Members on both sides of the House went to the European Assembly and their expenses were properly covered from this House.

Mr. Skinner: Is the Minister aware that when these City people met last week and were addressed by the Secretary of State for Defence on the question of raising funds to assist those Conservative, Liberal and other assorted Members of Parliament who attend the European Assembly—

Mr. Pardoe: Withdraw.

Mr. Skinner: —it was argued that the money was needed because the Labour Members of Parliament were boycotting that Assembly? I ask the Minister, and


you, Mr. Speaker, whether that is a breach of privilege.

Mr. Speaker: If the hon. Member wishes to raise a matter of privilege, he must do it at the proper time and in the proper way.

Mr. Prior: Perhaps I should start by congratulating the right hon. Gentleman on his new Parliamentary Private Secretary. I gather that, as usual, the hon. Gentleman has not got his facts right.

Later—

Mr. Skinner: On a point of order, Mr. Speaker. Is it not the convention to introduce questions on breach of privilege immediately they are discovered or made clear to Members of Parliament?

Mr. Speaker: Order. May I help the hon. Member? If he wishes to raise a matter of privilege, he may do so after the statement.

MINISTERIAL STATEMENTS

Mr. Michael Foot: On a point of order, Mr. Speaker. I appreciate how much the whole House is waiting to hear the Chancellor of the Exchequer's statement, but will you tell us, Mr. Speaker, whether you have had a request from the Prime Minister to make a statement on the Copenhagen meetings of the EEC Ministers? It would surely be a breach of custom that a meeting of that character should take place without a report being made to the House of Commons at the earliest possible date. It is a matter of importance for the House to know whether there has been such a request, because the kind of questions put to the Chancellor of the Exchequer may be influenced by whether the Prime Minister is to make a statement.
May I suggest, Mr. Speaker, that on a matter of such importance it would be improper for the Prime Minister to assume that he could, in the midst of a speech, make a report on which he could not be immediately cross-examined by the House. If you have not had such a request from the Prime Minister, perhaps he could make a statement at a later stage. I suggest that it would be a breach of the conventions which the House has agreed on reports of this

nature if the Prime Minister were not to make a statement.

Mr. Speaker: I have had no such request.

ECONOMIC SITUATION

Introduction

The Chancellor of the Exchequer (Mr. Anthony Barber): Over the past week or so, many have described the situation which we as a nation now face as by far the gravest since the end of the war. They do not exaggerate. The duty of the Government is to take whatever action the national interest requires, however severe, but equally to avoid measures which could make an already forbidding situation even worse.
Before I come to the measures which are immediately necessary, I must describe to the House the economic outlook against which the decisions have been taken. During the past two months a series of deliberate acts have been taken, both abroad and at home, which are at present starving this country of energy. The one over which this country has the least control was the decision of the Organisation of Petroleum Exporting Countries on 16th October to bring about by unilateral action an entirely new price régime for oil. As I have already made clear on a number of occasions, this change alone must inevitably make all oil-importing countries worse off than they would otherwise be, though, for reasons I shall explain, this change in the price of oil, without any other developments, would not in itself have frustrated a policy of economic expansion. But the subsequent announcements by some oil producers of their intention to reduce the supply of oil to the rest of the world to a level which is well below present requirements has created an entirely new situation.
Although the supply situation in 1974 is unpredictable, it is now only too probable that there will be an energy shortage in all the oil-importing countries leading to stagnant, if not falling, output accompanied by rising unemployment. In all these countries output is expected to fall faster than purchasing power, with consequent increases in demand pressures for goods and services. We will share those problems.
But in the case of our own country these problems have been compounded by another factor, specific to the United Kingdom—the industrial action in the coal and electricity industries and on the railways. This, at a critical time when we are expecting inadequate oil supplies, has cut down the availability of the primary alternative fuel, has diminished our ability to get available oil and coal to the right places for consumption and has also made it more difficult when electricity supplies diminish to ensure that essential services are not threatened.
At this immediate point of time, by far the greatest issue facing the nation is the fact that it is this industrial action, not the future shortage of oil, which has put British industry on to a three-day week and threatened the security of employment of so many of our people. As far as the industrial situation is concerned, I must repeat what I have said before. In the general interest, it is inconceivable that any Government could agree to a dispute being settled by an offer outside the limits approved by Parliament. Because this is the case, and because many millions of people are now beginning to suffer not just inconvenience and worry but hardship and, indeed, danger, I cannot believe that the sound common sense of the British people will not prevail.

The Economic Situation

In the United Kingdom just over half our energy is at present provided by imported oil, a rather lower proportion than most other industrial countries. It follows that, but for the immediate industrial disruption, we are better placed than most of our overseas competitiors, such as Japan, France or Germany. Furthermore, in the years to come our situation will be fundamentally improved by the increasing output of alternatives to imported oil—more nuclear power, more North Sea gas and, above all, by North Sea oil. But this cannot affect 1974, and it is the economic policy for the British economy in 1974, with our 50 per cent. dependence on imported oil, which we have to consider.

With all the uncertainties of the Middle East situation, it is impossible to predict, for the 12 months ahead, either the price the United Kingdom will have to pay for imported oil or the amount which will be

made available to us. But it is already inevitable that the price will be very much higher than in the first nine months of this year and that the supplies will be less than we need. The unanswerable questions are "How much higher?" and "How much less than we need?".

The extra cost of oil to our balance of payments is a severe blow. Our balance of payments was in considerable deficit before this oil situation developed, although there was then reason to believe that, as the effective depreciation of sterling worked through into the balance of payments, the deficit would begin to improve next year. A deficit was expected and has been financed in large degree by overseas borrowing by the public sector. But international borrowing will now take on an entirely new dimension for the world as a whole.

From some of the talks I have had, there is emerging, I believe, a general consensus that the industrial nations as a group must expect to some extent to borrow back the money to pay for this increase in the price of oil, rather than to join in a self-defeating deflationary or protectionist race to counteract the effect of the price rise on the current balance of each individual country. But in our case, given our substantial deficit without the oil problem, some corrective action now needs to be taken to keep the prospective total deficit within acceptable limits.

But the problems created by the rise in the price of oil coming on top of the rise in world prices of other commodities—severe as they are—are overshadowed by the uncertainties about the volume of oil which we will receive.

It has to be remembered that the levels of supply to which the Arab producers refer are those of certain months in 1973. But on our original forecast of the growth of the economy, our oil needs in 1974 would have been some 5 per cent. greater than this reference level.

We must now accept that output in 1974 is likely to be significantly below the levels for which we were hoping, although no worthwhile estimate of gross domestic produce can be made until it is possible to forecast energy supplies. The present troubles affecting coal, transport and electricity are bound to reduce output in the early weeks of the year.

As for oil, the best estimates are that a 10 per cent. shortfall is the most that can be coped with without loss of output. If, in 1974, oil deliveries were more than 5 per cent. below those in the reference period in 1973, this would amount to a shortfall of more than 10 per cent. compared with our needs. If over the year as a whole the oil cuts were to turn out of be 15 per cent. there would be a fall in gross domestic product rather than the 3½ per cent. growth which we had in prospect.

In this situation two points must be stressed. First, we do not know, and we cannot at this stage know, what energy supplies will be available throughout 1974. More than in any other period, therefore, it is essential to be prepared to act again as circumstances change or clarify. The second important point to stress is that oil shortage on the scale which seems possible could mean that, while the shortage lasts, we might have to accept the living standards of, say, a year ago rather than the improvements which we could have expected in the year ahead. To recognise that is to do no more than to face up to the realities of the situation.

Some cut-back in personal consumption will result automatically through short-time working and temporary unemployment. But the fall in output will be greater than the fall in demand, because of course, those who are unemployed will spend their social security benefits, and many consumers will reduce their rate of savings. If nothing is done there will be pressure of excess demand which will draw down stocks and hold back exports.

In this situation the Government have decided to take steps now to reduce demand by some £1,200 million in the coming year. These steps are, in my view, the most appropriate that can be made at this time, but the uncertainties are unprecedented and I will not hesitate to take further action at any time if developments should require it.

Taxation of Property Development

Before I come to the measures necessary to achieve this, there is one particular matter which can conveniently be dealt with at this stage—transactions in land and buildings.

I have in the past explained why I do not think that a straight increase in the rate of capital gains tax on land transactions is the answer. Unlike income tax, capital gains tax is charged at a flat rate, and I do not believe that it is the wish of anyone, who reflects on this problem, to increase that rate in the case of comparatively small transactions of the ordinary kind. The sort of large windfall profits, which I have previously described in this House as "offensive". fall into a different category.

The criticism is valid, notwithstanding that, as I explained in my Budget Statement last March, profits from speculation in land are already fully taxed as income, so that for individuals the rate can be as high as 75 per cent. or in some cases even 90 per cent., and that, in the case of company profits which are distributed, the combination of corporation tax and income tax can together amount to nearly 93 per cent. of the underlying profits.

Where land is held as an investment, however, gains on disposal are taxed as capital gains at a rate of 30 per cent. But, as I said in the Budget, it has to be recognised that any increase of taxation on land disposals could lead either to people withholding from the market land which would otherwise have been made available, or to an increase in land prices, or to both.

What has to be weighed, therefore, is the risk that higher taxation would have this effect against the widely-held public view that the taxation of certain land profits is seriously inadequate.

I have come to the conclusion that this is a risk which must be accepted, and I have accordingly decided that new measures are called for.

For the reasons I have given, I am sure that it would be wrong to raise the general 30 per cent. rate of capital gains tax. This is a long-term tax, and when this rate was fixed in 1965 the then Government justified the fact that it was lower than the rates of income tax by acknowledging that there was no allowance for the effect of inflation. That is still the case today. What is required is something which recognises the particular nature of certain land profits.

What differentiates land from other assets liable to capital gains tax is the


fact that with land an owner can quite fortuitously make huge windfall gains simply as a result of decisions made by planning authorities acting on behalf of the community as a whole. It is the huge gains due to this development value—or even to potential development value—which people find offensive. It is this element in the gain on a disposal—the development gain—which should be liable to taxation at a rate higher than 30 per cent.

This was, of course, the concept that underlay the betterment levy established by the previous Government's Land Commission Act. But that Act suffered from a number of fundamental defects which were, no doubt, the main reason why its repeal went unmourned. The truth is that the betterment levy was a bad tax, and that was why it failed.

It was not graduated according to a taxpayer's ability to pay. It was charged on individuals when there was no disposal, so that those individuals often had to realise other savings to pay it. It sometimes imposed a burden on the ordinary owner-occupier and on others who were in no way involved in land development or land speculation. Also, perhaps most important of all, the levy fell upon a huge number of totally insignificant transactions which involved a mammoth bureaucracy and a vast interference with thousands of perfectly inoffensive small transactions in land, far removed from the kind of large windfall gains which have been the principal source of disquiet in recent years.

I am sure that there is no wish to return to that kind of impost. Whatever is done must avoid each of those objections to the betterment levy.

The House will remember that during the debates on the Land Commission Bill my right hon. Friends argued that the particular problem of development gains, as distinct from normal land transactions, could be dealt with by an extension of the capital gains tax. This is the concept which we have been working on with a view to legislation in the next Finance Bill. The change will now be made forthwith.

To avoid the mistakes of the betterment levy, the new charge must have three principal features.

First, it must be charged at rates which take account of the vendor's ability to pay.

Second, it should normally be paid only when there is a disposal.

Third, the great mass—[Interruption.] What I have to say concerns many people throughout the country. I hope, therefore, that the House will allow me to deliver my statement in its normally courteous manner. Third, the great mass of small land transactions and, of course, all sales by owner occupiers must be excluded. These are not the cases which have given rise to public disquiet.

Legislation will accordingly be included in the 1974 Finance Bill to tax development gains much more severely. The new tax rates will apply to disposals of land or buildings in the United Kingdom after today.

Tax at the new rates will be charged on the gain in development value during the vendor's period of ownership. But only gains above a number of closely-defined limits will be subject to the new charge.

Subject to these limits—which I will outline in a moment—gains in development value made by individuals who are liable to income tax will be taxed as income at normal income tax rates up to 75 per cent. Development gains made by companies will be taxed as income at the full corporation tax rate, but companies will not be able to set payments of advance corporation tax against the corporation tax payable on these gains. Individuals will be able to spread the gain backwards over four income tax years or such lesser period during which the land or buildings have been in their ownership.

As with the existing charge to capital gains tax, the principal private residence or a house occupied by a dependent relative will be exempt.

The limits will be as follows.

First, there will be excluded from the new charge all disposals of land and buildings by an individual in any year where the total proceeds do not exceed £10,000. For companies, in order to avoid the danger of fragmented sales by companies in the same ownership, the threshold will be £1,000.

Second, there will be excluded disposals where the total gain—that is, existing use gain as well as development gain—is less than 20 per cent. of the cost, That simple test will enable the Revenue to disregard at a glance many disposals where the development gain must be quite small.

Third, there will be excluded disposals where the disposal proceeds do not exceed the current use value plus 10 per cent. That will take out most cases where there is merely a slight prospect of future development.

These limits are essential to exclude the great mass of small disposals, or disposals with a little development value, which would otherwise clog up the machinery of valuation and collection.

No significant revenue is at stake with these limits; and they will enable the new charge to be operated by the Inland Revenue with relatively few additional staff.

Also, as I have said, a principal private residence, or a house occupied by a dependent relative, will be exempted from the new charge, just as they are exempted from the capital gains tax.

There will be provisions to extend the charge to disposals of shares in close land-owning companies and to interests in certain trusts, which means that it will be of no advantage to an individual to hold his land interests through a private company.

I turn next to another, and even more difficult area in this general context of the taxation of land and buildings—the case where a property investment company has unrealised gains accrued over many years on which, because there are no disposals, any capital gains tax is postponed indefinitely. This was, of course, inherent in the capital gains tax as introduced by the then Government in 1965. An example will illustrate the point. A development company acquires land at its current use value. It subsequently gets planning permission, builds, and lets the building without any premium. Under the law as it stands, the letting in these circumstances is not a disposal for the purposes of capial gains tax.

This general problem also we have been considering, and I have come to the conclusion that it is wrong to allow liability

to be postponed in these circumstances because, as a matter of common sense, the letting of the premises should be treated as a disposal.

The 1974 Finance Bill will therefore provide that where material development of land or buildings in the United Kingdom, other than residential development, has been carried out by an owner and the property is subsequently let for the first time, this first letting will be treated as a disposal for all purposes of the capital gains tax, including, where appropriate, the charge on the development gain. The charge will apply to all such first-time lettings after today.

Here again, it is necessary to have a limit below which this new occasion of charge will not operate. It would be wrong for the Revenue to be concerned with the great mass of small commercial lettings that may be made of new buildings up and down the country—for instance, where a shop with a store at the back is built and the store is let to a tenant. Only, therefore, where the proceeds of lettings are equivalent to a rack rent of £2,500 or more a year will a disposal be treated as having taken place for capital gains tax.

Finally, on this part of my statement, I should make it clear that any capital gains from the disposal of land which are not subject to the new charge or to the new rule about first lettings—for instance, gains below the thresholds and so on—will remain subject to the normal tax charge on capital gains.

Because of the importance of these changes, which I have inevitably had to explain at some length, the Inland Revenue is publishing a fuller statement setting out more of the details which will be contained in the legislation.

It is obviously very difficult to estimate the yield of proposals of this sort, but the best estimate that can be made is that their total yield will amount to some £80 million in a full year.

Credit Control, Indirect Taxation and Energy Prices

I return now to the action which is necessary to reduce home demand in order to leave sufficient of our reduced resources available for export and for


productive investment in the private sector.

First, consumer credit. Despite the inherent disadvantages in normal circumstances, I am sure that it is right, in the present exceptional situation, to reduce demand arising from personal consumption by reimposing controls on hire-purchase, credit sale and hiring agreements. My right hon. Friend the Secretary of State for Trade and Industry has accordingly made the necessary orders. These controls will cover a wide range of consumer items and will take effect from midnight tonight. The details of the terms and coverage are being announced separately by the Department of Trade and Industry.

The banks and finance houses are being asked not to lend to persons or to offer check trading facilities on terms more favourable than those permitted under the hire-purchase controls. At my request, steps are also being taken to ensure that the provision of credit through credit cards is similarly restrained.

With my agreement, the Governor is also taking steps to strengthen the techniques for controlling the growth of money and credit. The clearing banks have been asked to make certain changes in their practices designed both to limit arbitrage transactions and to secure a better control over the growth of their lending. The Governor is also requesting all banks and deposit-taking finance houses to adhere to a new technique under which non-interest-bearing special deposits would be placed with the Bank of England if their interest-bearing liabilities grow at more than a specified rate.

With the introduction of this new device, and in view of the pressures on banks' liquidity which may arise in the period ahead, the call for the second 1 per cent. of special deposits announced on 13th November is no longer required. The intention of these monetary control changes is not to impose an additional squeeze outside the field of consumer credit: it is to ensure that we have effective control over money and credit during the difficult period which lies ahead. The new technique will enable the authorities to control the volume of money and credit with less reliance on general calls for

special deposits: it can therefore be expected to reduce the pressure on bank interest rates.

Under the legislative provisions governing VAT, and by means of the more traditional regulator which covers the Revenue duties, the taxation of goods and services can be raised without the need for a Finance Bill. The effectiveness of action on indirect taxation is well established, by its frequent use in the past.

Its disadvantage is, of course, that any increase in the taxation of goods and services makes a direct contribution to raising prices, but that is a disadvantage which, depending on the circumstances, previous Governments have accepted. The conclusion which I have reached is that the necessary restraint on domestic demand should be achieved in other ways, and, therefore, there will be no increase in indirect taxation at this time.

There is one area of prices which I should particularly mention. At a time of the most acute energy shortage and in our present financial difficulties, it is anomalous—to say the least—that we are subsidising coal and electricity prices at a mounting rate. Unless action is taken on coal prices, the financial support required for coal, which exceeds £150 million this financial year, could easily be doubled next year. The subsidy for electricity is running at about £75 million a year, but that does not take account of the cost of the present emergency. Consultations with the industries on the price of coal and electricity will, therefore, be carried out as a matter of urgency. Arrangements will be made to safeguard the neediest households.

Direct Taxation

I come now to the taxation of income, where there will be one change. There is a dilemma which has to be squarely faced. Any increase in the basic rate of income tax is bound to hit millions of ordinary people who, through absolutely no fault of their own but entirely as a consequence of the deliberate actions of others abroad and at home, will soon find themselves with thinner pay packets as a result of the three-day working week. So, with one exception, I do not intend to increase the direct taxation of incomes.

Those on higher incomes will, in general, obviously be better able to cope with the situation we face. I have decided


that in respect of the last year of surtax, 1972–73, there will therefore be a 10 per cent. surcharge on total surtax bills. The surcharge will be payable half on 1st July 1974 and half on 1st January 1975.

The surcharge will not apply to anyone over 65 on 5th April 1974. The yield will be £35 million.

Public Expenditure

With the fall in output resulting from the shortage of energy, there will be some automatic fall in private demand as incomes fall because of short-time working and temporary unemployment. But without a deliberate act of Government there would be no such fall in demand by the public sector. It would be quite wrong for the public sector to continue unabated its demands for goods and services and its consumption of energy, leaving the private sector to bear the whole of the brunt of the energy shortage.

Despite the small rise in public expenditure which was planned for each of the next three years, I am sure that it is right that the main weight of the action I am taking should lie not on persons or private sector industry but on public expenditure. To do that will make for a more tolerable level of personal consumption and release resources for exports and for private industrial investment.

It is important to be clear about the purpose of reducing public expenditure in a situation of energy shortage. Shortage of energy and constraint on economic growth are bound to lead to a rise in unemployment. That cannot be avoided. It is inherent in the situation. But the direction of the cuts in public expenditure must be such as to avoid, as far as is humanly possible, a reduction in employment in the public sector being added to the inevitable unemployment created by the energy shortage in the private sector. It is the consumption of fuel and power by the public sector that has to be reduced, not its employment of people. There would be no point, in the wholly unique situation we face, in saving public expenditure by deliberately reducing the numbers of public servants.

The particular reductions in public expenditure must, therefore, be directed

not just, as elsewhere, to cutting the demand for energy in the form of heating of buildings, use of cars and lorries, and so on, but, and of far greater significance, to cutting the indirect demand for for energy by reducing public construction programmes and public purchases of supplies of all kinds.

The Government have, therefore, decided that public expenditure on building and construction, on plant and equipment, and on supplies of all kinds will be reduced, and, subject only to a very few exceptions, the reductions will apply in respect of all programmes which use resources in this way.

There will be no reduction in investment in the energy industries themselves, or in public sector house building.

The Ministers concerned are accordingly making arrangements for a reduction of one-fifth in the total of their capital programmes, and of one-tenth in the total of their procurement of supplies and other current expenditure on goods and services, excluding staff costs. Somewhat lower reductions will apply only where essential supplies—for example, for the National Health Service—would otherwise be jeopardised.

In implementing this decision, the Ministers concerned will determine the priorities within their own programmes. The Ministers concerned will make every effort to avoid adding to unemployment in cases where work could otherwise proceed because supplies of materials are adequate. Cases of special difficulty will be considered within the Treasury, but the renegotiation of contracts in certain cases cannot be excluded if we are to make sure that work which is of a lower priority does not pre-empt resources needed elsewhere—for instance, to maintain exports or important household needs.

These decisions on public expenditure will entail a reduction in the total of the current expenditure which was accepted by the local authorities in England and Wales in the recent rate support grant discussions, and a reduction in the amount of grant previously envisaged for 1974–75. Corresponding arrangements will be made in Scotland.

The usual detailed annual White Paper on Public Expenditure, which was due to


be published this week, was prepared before the developments which have caused this statement. Although it does not take account of these decisions, it will still be published as a base line for the reductions which I have announced.

The reductions in 1974–75 will total some £1,200 million. A table will be circulated in HANSARD setting out the reductions in the various programmes and the effect on the totals of public expenditure which had previously been planned for next year.

This is by far the largest reduction in public expenditure for a succeeding year which has ever been made, both in absolute and in relative terms. It is bound to mean curtailing and deferring many desirable projects, to which we had been looking forward, but I think that the British people will prefer this way to the alternatives which I have rejected at this time.

The result will be that, whereas public expenditure on goods and services had been expected to rise by nearly 3 per cent. next year, it will now fall by over 3½ per cent., and whereas total public expenditure was expected to rise by under 2 per cent. next year, it will now fall by some 2 per cent.

As immediate action will be necessary to fulfil these decisions, there will in consequence be a reduction also in this year's public expenditure.

Conclusion

I do not think that any of my predecessors would dispute that, in the face of the many uncertainties ahead of us over the coming year, an economic judgment at this time is—to put it mildly—more difficult than usual. That is why it is important to say quite openly that, while I believe that the judgment I have made is the right one, I shall not hesitate to take, at any time, any further action which may be required in the national interest.

Within five to seven years about two-thirds of our oil requirements will be met from the North Sea, and beyond that there is every hope that production will grow to equal our total needs. This alone will give Britain an immense industrial advantage. It will transform our balance of payments.

But over the next year or so, it must be said that we in Britain face a severe test, and that over this period we shall not achieve the prosperity we expected. No Government, no party, could honestly pretend otherwise.

I hope the House will permit me one personal word. I have taken the action which I believe to be right. I have tried to be fair. I hope the nation will respond.

Mr. Healey: The House has listened to a very sombre statement, and I do not think that any of us will complain about its length. It is that Autumn Budget for which many of us had been waiting, and I hope that I may be allowed a little more latitude than is normal in asking questions following a ministerial statement, because of the comprehensive statement made by the right hon. Gentleman.
First, the Opposition welcome the degree of realism shown by the Chancellor in facing some of the facts of our national economic situation. Many hon. Members on both sides of the House feel that if the Chancellor had shown the same degree of realism when he framed his Budget last March some of the sacrifices which the nation faces today would have been unnecessary.
Having said that, I am bound to say that in the measures which the Chancellor has outlined to deal with our national situation he has shown a degree of discrimination in favour of the private individual against the public services and public expenditure which will undermine the appeal for national unity which the Prime Minister made only a few days ago.
In his remarks about the contribution made by current industrial disputes to our problem the Chancellor invited his critics to put some facts on record. The fact is—and the House knows this—that the cuts which the Chancellor has announced would have been just as necessary if there had been no energy problem and no industrial disputes.
Figures published in the last few days show that in the last two months our balance of payments deficit has been running at an annual rate of more than £3,000 million per year, and that is in a period in which the increased cost of Arab oil could not have been more than £10 million to £20 million.
Figures published on Friday show that, in the first year of the Government's humorously entitled counter-inflation policy, inflation was running at more than 10 per cent.—

Sir Harmar Nieholls: On a point of order. Mr. Speaker. Is there a motion before the House? We seem to be debating instead of asking questions. For one right hon. Member to take up all the question time is not fair to the House or to back benchers who want to ask questions which will enlighten them on the terms of the statement.

Mr. Speaker: It is the custom, following a statement of the kind that the Chancellor has made, for the Opposition spokesman to be allowed a certain amount of time. On each occasion there is an objection from the Government side. I seem to remember the hon. Member for Ebbw Vale (Mr. Michael Foot) making the same point when a statement was made in the previous Parliament.

Mr. Healey: As I was saying, inflation was running at more than 10 per cent. during the first year of the humorously entitled counter-inflation policy adopted by the Government, and last week's figures also show that growth had fallen in the last three months to under the rate of 3 per cent. per year, and is still falling. I am glad that the Chancellor at last gave us a more realistic assessment of the implications of the oil crisis, although it gives a different impression from his earlier statement and, above all, from that given by his right hon. Friend the Secretary of State for Trade and Industry.
The background to the proposals which the Chancellor has put before us is an oil crisis which, as the right hon. Gentleman fairly said, will lead the whole of the developed world into a trade recession and a recession of production over the next 10 months which Britain is in a weaker position to meet than any of her competitors.
The Opposition welcome what the Chancellor said, if I understood him rightly, about agreement on international action to neutralise the effect on trade and the payment of unexpended Arab surpluses arising out of the increase in oil prices. But it is quite clear from what the Chancellor said that this is a national

crisis that will require the best efforts of us all to resolve.

Mr. William Clark: On a point of order, Mr. Speaker. I trust that in your generosity you will allow hon. Members on this side of the House also to debate this motion, or to debate what the Chancellor said. I always understood that when a Minister made a statement questions were allowed but not a debate. I should like to ask whether, if I am fortunate enough to catch your eye, I, too, shall be allowed to debate the matter?

Mr. Speaker: I have already referred to this. It is a convention of the House that, when a statement of this sort is made by whichever party is in office, the Opposition spokesman is allowed considerable latitude.

Mr. Biggs-Davison: Further to that point of order Mr. Speaker. While it is in accordance with precedent to allow latitude to a Front Bench spokesman, is it not an abuse that a spokesman from the Front Bench opposite should be allowed to deliver a lecture on Socialist economics which, quite clearly, was written before the Chancellor made his statement?

Mr. Speaker: I anticipated these points of order, and I examined the precedents before coming to the House. It is a convention that a certain amount of latitude should be given. I do not think that there should be abuse of that convention, and I am not saying that there has been any yet. It is a convention which I propose to observe.

Mr. Healey: In the light of what the Chancellor told us, is it not the Government's duty in this situation to achieve maximum growth out of the diminished resources that are likely to be available to this country over the next year? Is it not impossible for any Government to achieve those objectives unless they are prepared totally to change our national priorities and to allocate scarce resources in order to maximise the possibilities of growth?
The Opposition's contention is that by indiscriminate cuts in public expenditure right across the board the Chancellor is likely to make all our problems more difficult—not less difficult—to solve, and I should like to put this question to the


Chancellor of the Exchequer. The right hon. Gentleman had something to say about the contribution made by current industrial troubles to a possible reduction in growth. Am I to infer from his speech that the right hon. Gentleman does not assume that the country will be subjected to a three-day week for the next 12 months? Am I not right in assuming that the whole of the right hon. Gentleman's statement and his proposals assume that those industrial problems will be overcome in the very near future?
Were not all his proposals related either to the economic situation which existed before the energy crisis or to the aggravation of that situation created by the increase in the price of Arab oil and the probable cuts in its supply? Is it not the case that a cut of just over £1,000 million in the Government's deficit would be totally irrelevant if we were dealing with the sort of situation which the Prime Minister tried to frighten us into accepting last Thursday?
Can the Chancellor explain how, at a time when energy is likely to be a major constraint on our national growth, he is subjecting the oil, coal, electricity and gas industries and the nuclear power industry in its public aspects to the same 20 per cent. cut as the Maplin airport?—[HON. MEMBERS: "No."]—If I misunderstood the Chancellor about this, I invite him to make it clear in his statement. So far as I could understand it, he talked about reducing the element of subsidy on the products of the nationalised industries. Does he propose to do that by increasing the price of their products? If not so, how does he propose to do it?
Secondly, is steel production to be exempted from the cuts to which the right hon. Gentleman referred? Thirdly, why is he not prepared to submit less necessary public expenditure projects such as Maplin, the Channel Tunnel and, above all, defence, to a disproportionate cut compared with the more essential elements in public expenditure?
I pass now to some questions about the tax side of the Chancellor's proposals. The Chancellor made it clear that during the next year living standards are likely to fall. What many of us—many on the Government side of the House, as well as the Opposition—were hoping to hear from the Chancellor was talk of some

redistribution of the tax burdens. We say that the cut in living standards should be borne by those best able to bear it. But all that we have concerning direct taxation is a levy which will bring in £35 million—I think the Chancellor said—from people who paid surtax last year.
Why has the Chancellor made no proposal whatever in his statement to cushion those whose earnings are below the average against the appalling increases in rents, mortgage rates and the cost of food, which are bound to continue by the Chancellor's own arguments? Why did the Chancellor have no proposals for dealing with the 100 per cent. increase in bank profits over the last year, due not to any increased productivity by bank staff but wholly to the means by which the Chancellor is trying to deal with economic problems that he has created for himself?

Mr. Gorst: On a point of order, Mr. Speaker. Surely the usage of the House, Mr. Speaker, has been taken to such an elastic extent that it has by now snapped.

Mr. Speaker: That is a matter for the Chair. I remind hon. Members on both sides of the House that we are to have a two-day debate.

Mr. Healey: Why has the Chancellor made no proposal to withdraw the tax-free loan interest which he introduced in his Budget last year and which, in itself, has been in part responsible for our rate of inflation?
I come now to the Chancellor's proposal for dealing with profits in land and property. The Opposition welcome at least the Chancellor's bold and accurate statement about the nature of these profits and their obscenity in the current situation, or, indeed, in any situation. But can the Chancellor explain how his proposals will do anything to remove the monstrosity of the treatment of Centre Point, with which the Government promised to deal over a year ago and which the Government have now decided to do nothing about?
The Chancellor told us that he proposes to raise £80 million out of various forms of taxation of property companies which have seen their assets increase in value by thousands of millions of pounds in the last two or three years. Does not the right hon. Gentleman's new tax on


rental, treating it as disposal, apply only to the first rental, property companies remaining free to increase their rents year by year in line with the enormous increase in the value of the property which they rent? Does not the Chancellor feel that in this situation it would have been right to mulct the property companies by a special levy of at least some thousands on the millions of pounds which they have made out of inflation in the last few years?
Finally—[Interruption.]— does the Chancellor recognise that in seeking to place the burden of the inflation for which he has been responsible on local authorities, the public services and the social services, and in sparing the richer sections of the community from making a contribution commensurate with their wealth, he has undermined the possibility of creating that national unity which is the nation's only hope in dealing with the current crisis?

Mr. Barber: I could have adopted the device of one of my predecessors, in a previous Labour Government, and made my statement as the opening speech in a debate. I decided not to follow that practice on this occasion because I thought, out of courtesy to the House, that it would be helpful to make my statement today so that it could be considered before the debate began. We would have avoided the questions if I had adopted the previous practice.
Perhaps hon. Members would like to hear the answers to some of the points raised by the right hon. Member for Leeds, East (Mr. Healey). Concerning the Government's economic strategy, before the oil crisis and before the self-inflicted shortages of energy—

Mr. Swain: Tell us the answers.

Mr. Barber: —both the TUC and the CBI agreed that it was perfectly reasonable to keep the rate of growth up to that of productive potential. That was the agreement between us.
Next, the right hon. Gentleman asked how my measures were related to the possible length of the present industrial disputes in the coal and electricity industries and on the railways. In deciding upon the particular measures which I considered best and most appro-

priate at this time, I certainly had in mind the fact that as a result of this industrial action there would be many people in this country who would be suffering considerable hardship and who would be having thinner pay packets. It was to some extent for this reason that I decided on the particular measures that I have announced today.
Because some hon. Members opposite were interrupting at the time and obviously did not hear what I said about the energy industries, I will repeat it. In my statement I said that there would be no reduction in investment in the energy industries. As for steel, I have no doubt that, as a result of the shortage of energy, that industry will not be able to achieve the targets that it would have otherwise achieved. We have already had a foretaste of that from some of the figures of production which were reported recently.
The right hon. Gentleman went on to make some general criticisms about the measures that I have chosen. He gave the House the clear impression—I understand from what he has said outside that it is his view—that instead of the action this Government have taken to deal with public expenditure, to which he objects, and to deal with the expenditure of local authorities, to which he objects, in his turn, having said that it was necessary to take action, he would presumably have taken action on direct or indirect taxation. Therefore, those outside the House will take note of the right hon. Gentleman's choice.
I have given the House the facts. There are many uncertainties and many conflicting considerations, but, bearing all these in mind, I have decided on the measures which I believe are most appropriate, in all the circumstances. The right hon. Gentleman also made an extraordinary statement, which I took down. He complained and criticised us over what he called our "discrimination in favour of the private individual". I think that those words, too, will be noted outside. Those outside will know where, if the right hon. Gentleman had had to act over the oil problems which face the country now, the burden would have fallen under his administration. Perhaps it would have been better, for the right hon. Gentleman's sake, if I had adopted


the practice of his predecessor and not allowed myself to be questioned.

Sir John Hall: Is my right hon. Friend aware that I have not written my speech for tomorrow's debate, so my question will be brief? Is he further aware that the implications are so far reaching that it is difficult to deal with them in the form of question and answer? Will my right hon. Friend confirm that, in the new arrangements which he has announced for the banks, industry's ability to obtain credit for the financing of industrial development will not be limited?

Mr. Barber: My hon. Friend is right in that assumption. There is no such intention. The objective is to limit credit for private consumption and not in any way to limit it for industrial development.

Mr. Dell: In the cuts in public expenditure, can the Chancellor say what discrimination he has made in favour of the regions?

Mr. Barber: The grants, loans and subsidies available to the regions under the Industry Act will not be affected by the cuts. Areas which have higher unemployment than the rest of the country will, therefore, get some protection from the effects of the crisis through the continuation of those policies. In the serious situation that we face, the effects of the action we are taking are bound to be spread throughout the country.

Mr. Powell: Is my right hon. Friend aware that those of us, at any rate on this side of the House, who have for many months been stressing the urgency of budgetary measures to deal with our underlying problem of inflation, will offer to him every encouragement and support in carrying through those of the measures which he has announced?

Mr. Barber: I say very genuinely to my right hon. Friend, I am grateful.

Mr. Thorpe: Would the right hon. Gentleman confirm that it would be his hope that his financial statement will not only deal with the management of the economy but psychologically that it will make all sections of the community more ready to accept the prices and incomes policy? Does the Chancellor feel that the Government's objective has been achieved and is it the Government's view

that phase 3 still remains realistic? Second, what is the Chancellor's assessment of the effects of his measures on unemployment? Third, may we take it that the Government intend to make a more rigorous control of prices, and why, in particular, has he excluded rents? Fourth, has the right hon. Gentleman considered, and if so why has he not adopted, the concept of land value taxation in order that the assessed revaluation of capital appreciation, whether disposed of or not, may be taxed? Finally, in view of the admitted importance of energy, has not the time come for urgent consideration of the appointment of an energy commission to deal with the exploitation and conservation of our resources?

Mr. Barber: On the right hon. Member's first point, I am afraid that it is inevitable and inherent in this situation, with the shortage of energy, of oil and coal, and all the problems that we face in the transport of both oil and coal—as a result of actions deliberately taken, as I said, outside and within this country—that there will be unemployment and short-time working. No Government could take action to avoid this so long as these problems persist. As for taxation of land, I have considered all the aspects and I came to the conclusion that, in all the circumstances, by far the best and most practicable way—there are great practical problems—was to deal with it in the way that I have mentioned.
May I comment on the incomes policy and the right hon. Gentleman's request that it should be accepted? I say, as I said in the concluding words of my statement—which, for understandable reasons were not clearly heard by hon. Members opposite—that in the action I have taken I have done what I believe to be right in the national interest in the circumstances. Furthermore, I have tried to be fair. I now hope that the nation will respond.

Sir H. d'Avigdor-Goldsmid: On this sombre day, will not my right hon. Friend cast a little light, a ray of brightness, on the proceedings by telling us by how much these measures which he has announced will reduce the Government's borrowing requirement?

Mr. Barber: The reduction in public expenditure to which I referred—£1,200


million in the next financial year—will reduce the borrowing requirement, pound for pound, by the same amount.

Mr. Swain: Is the Chancellor of the Exchequer aware that his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) warned him months ago about the situation that was gradually but inevitably creeping upon the Government—months before the wage negotiations with the miners even began, let alone before the industrial action took place?

Mr. Barber: It is well known that both my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and I have been warning each other of various things for a long time.

Sir Harmar Nicholls: Is my right hon. Friend aware that while his statement may have made it quite clear that public housing will be relieved from some of the imposts which he has described, it was not clear what would be available for private housing? Private housing must work in partnership with public housing or our housing needs will not be properly met.

Mr. Barber: Certainly what I said about public sector housing investment was said in relation to my statement about public expenditure, but one hopes that, despite the shortages that we shall undoubtedly have in building materials, in bricks, cement and steel, as a result of the shortage of energy, the maximum priority will be given to housing in the private sector. Of course, if the public sector's demands for these materials for construction of one kind or another had continued unabated, there would have been even less available for private sector housing.

Mr. Frank Allaun: Will the 10 per cent. cut in public expenditure apply to arms spending, which this year increased by £520 million to £3,350 million? Is the right hon. Gentleman aware that if the Government cut back in this direction to the same level of the gross national product as is devoted to armaments by the other West European NATO countries, it would save our country £1,083 million a year and thus obviate the need for nearly all the other cuts, which will hurt our people severely?

Mr. Barber: The reduction in public expenditure on defence under these proposals amounts to £178 million. The hon. Member will be pleased to know, I am sure, that the forces that we are contributing to NATO will not be reduced, despite the fact that some improvements in equipment may be delayed as a result of these decisions.

Several hon. Members: Several hon. Members rose—

Mr. Speaker: Order. I should like the help of the House. This cannot go on for much longer. Those who catch my eye now to put a supplementary question may be diminishing their chances during the debate.

Sir R. Cary: Is my right hon. Friend aware that, for a few months past, I have been wondering what it meant to be 75 years of age? For his statement on surtax, may I thank him? May I point out that a large number of firms have installed generators with sufficient oil stocks to run their factories? May the firms which had this foresight be allowed to use those generators to help employ their work people?

Mr. Barber: I will draw what my hon. Friend said to the attention of my right hon. Friend who is responsible. As for your adjuring us, Mr. Speaker, to be careful about putting questions now, I hope that the fact that the right hon. Member for Leeds, East was the first to catch your eye will not prevent him from being called in the two-day debate.

Mr. John Morris: Am I right in assuming that, so serious does the Chancellor regard the state of the economy, if the trouble with the industrial unions were resolved tomorrow, he would not change his proposals by one comma?

Mr. Barber: If, as we all hope, the industrial troubles are settled soon, certainly there would be no immediate change in the proposals that I have made.

Mr. Tapsell: When will the special measures be announced to which my right hon. Friend referred to protect the poorer sections of the community from the proposed increases in the price of coal and electricity—before Christmas or not? Will they include measures to take direct action to stabilise the cost of certain basic foodstuffs?

Mr. Barber: We have been over the ground on food subsidies many times, and we have also discussed the considerable increase in taxation which would be necessary if we were to make the sort of stabilisation which has been suggested by right hon. and hon. Members opposite. As for energy prices, what I said, as my hon. Friend will find if he looks up the exact words, was that consultations with the industries will be held as a matter of urgency. Until those consultations have been completed, it would be wrong to say any more about the

PUBLIC EXPENDITURE: 1973–74 AND 1974–75


£ million






Reductions for






1973–74 Cmnd. 5519
1974–75 Cmnd. 5519
Capital
Procurement
1974–75 Total
1974–75 Revised programmes


At 1973 Survey prices


Defence and external relations
…








1. Defence
…
3,398
3,418
−16
−162
−178
3,240


2. Overseas services
…
590
603
—
—
—
603


Commerce and industry


3. Agriculture, fisheries and forestry
…
576
532
−4
−3
−7
525


4. Trade, industry and employment
…
1,917
1,664
−10
−9
−19
1,645


5. Nationalised industries' capital expenditure of which—


Fixed assets:


Fuel and power industries
…
1,815
723*
—
—
−264
1,801


Other industries
…
1,323
−264
—


Other capital expenditure
…
19
—
—


Environmental services


6. Roads and transport
…
1,570
1,632
−188
−24
−212
1,420


7. Housing
…
2,165
1,963
—
—
—
1,963


8. Other environmental services
…
1,425
1,409
−139
−9
−148
1,261


9. Law, order and protective services
…
948
973
−21
−11
−32
941


Social services


10. Education and libraries, science and arts
…
4,163
4,249
−119
−63
−182
4,067


11. Health and personal social services
…
3,286
3,378
−69
−42
−111
3,267


12. Social security
…
5,458
5,725
—
—
—
5,725


Other services


13. Other public services
…
419
412
−4
—
−4
408


14. Common services
…
433
459
−17
−6
−23
436


15. Northern Ireland
…
770
782
—
—
—
782


Total programmes
…
28,933
29,264
−851
−329
−1,180
28,084

arrangements which in the event would be made to safeguard the neediest households.

Mr. Joel Barnett: How much will the Chancellor's statement on land and property help or not help to let Centre Point?

Mr. Barber: I do not propose, on an occasion when I am making a statement about a general change in taxation—a question and answer occasion—to deal with the question of a specific tax claim.

Following is the table:

£ million






Reductions for






1973–74 Cmnd. 5519
1974–75 Cmnd. 5519
Capital
Procurement
1974–75 Total
1974–75 Revised programmes


16. Debt interest
…
2,950
2,800
—
—
—
2,800


Contingency reserve
…
—
150
—
—
+ 100
250


Shortfall
…
−400
−300
—
—
−100
−400


Adjustment to 1973–74 out-turn prices and relative price effect
…
865
890
−25
−10
−35
855


At 1973–74 outturn prices


Total
…
32,348
32,804
−876
−339
−1,215
31,589


Percentage increase (+)/decrease (−) on 1973–74:


%



%


in total expenditure (cost terms)†
…

+ 1·8



−2·0


in purchase of goods and services (volume terms)
…

+2·9



−3·7


*This figure embodies assumed shortfall of £100 million.


† Excluding Investment Grants.

COMPLAINT OF PRIVILEGE

Mr. Skinner: You will recall, Mr. Speaker, that when I raised this matter at Question Time I mentioned a dinner in the City concerned with the raising of sufficient funds for those Members of Parliament who attend the Strasbourg Assembly.
I referred to an article in the Observer yesterday by Iain Murray on the plight of our Strasbourg MPs. He referred to the fact that 100 City bankers were guests at the Banqueting Hall in order to assist those Members. They were addressed by the Secretary of State for Defence, Lord Carrington. The article said:
The burden of his message was that our men and women in the European Parliament were, what with one thing and another, finding it difficult to make ends meet"—
notwithstanding the fact that they get £25 a day tax-free, with expenses on top—
and their task would be greatly eased if the City could see its way clear to providing the odd £100,000 for each of the next four years.
Perhaps the most important point, which should concern you, Mr. Speaker, is that the article went on to say:
The explanation was that, because the Labour Party persists in its stubborn refusal to send MPs to Strasbourg, it would be both embarrassing and inexpedient for the Conservatives"—
and, one assumes, the Liberals and the hon. and learned Member for Lincoln (Mr. Taverne) as well—
to ask the House of Commons for cash, particularly at a time when the Government is trying to cut back on public expenditure.

I am not moved to raise points about breaches of privilege when they concern individual Members, but I am concerned about breaches of privilege which affect the ability of an Opposition to carry out a policy that they believe right. Therefore, since £100,000 is sought to be raised from the City for people who attend Strasbourg, since they would be taking action as a result of the determination of Labour's policy, and since we are supposedly to debate a Companies Bill some time, although the Government seem rather loth to get around to it, which may well have more than an indirect effect on the City and its relationship not only with hon. Members with with people outside, I suggest that this article needs your close scrutiny, Mr. Speaker, and should be examined to ensure that what takes place between the City and those hon. Members who attended that dinner does not result in a breach of privilege.

Mr. Speaker: I think that the hon. Member said that he was relying on a report in a newspaper—

Mr. Skinner: I usually do.

Mr. Speaker: Will he bring it up? [Copy of newspaper handed in.] I am obliged to the hon. Member. I will rule in accordance with practice on his point tomorrow.

Mr. English: Further to that point of order. When you are ruling, Mr. Speaker, would you also take into consideration my related question, asked last Monday and not yet answered, as to why, apparently, the Civil Aviation Authority


is operating a special plane at a rate lower than it licenses—

Mr. Speaker: Order. I do not detect any question of privilege in that matter.

ECONOMIC SITUATION (DEBATE)

Mr. Wellbeloved: On a point of order. You said, Mr. Speaker, that hon. Members who were called to put questions to the Chancellor might find their chances decreased of catching your eye in the two-day debate. May we take it that other hon. Members who were standing and did not catch your eye have increased their chances?

Mr. Speaker: There is another factor. It may depend upon how much noise is made from a sedentary position.

Mr. C. Pannell: On a point of order. I wonder, Mr. Speaker, whether you will reconsider your earlier statement. I think it is out of character of the Chair that it should issue anything which either stops a Member from asking a question or impedes him, or which might indicate that the Chair has any reservations. The Chair must surely face the debate at the time. With great respect, I wonder whether you, Mr. Speaker, will reconsider that statement.

Mr. Speaker: With respect to the right hon. Gentleman, I consider very carefully the number of times hon. Members have spoken, the extent to which they have taken part in Questions and sometimes, also, the kind of interjection which they have made from a sedentary position. Those are all very relevant matters when the Chair is exercising its discretion.

Mr. Wellbeloved: Further to that point of order. On the question, Mr. Speaker, of your taking into account sedentary interruptions, may I ask how they are assessed? You implied that I myself had been guilty of making a sedentary interruption today. If you did not, I accept that my chances are very good in the two-day debate. But now that you have told us that you take into account such interruptions, I wonder whether you will enlarge upon how you make an assessment. Speeches and questions are

all recorded and can be accurately assessed from the OFFICIAL REPORT. But I wonder how those who advise you judge the other matter of interruptions from a seated position.

Mr. Speaker: I rely upon my own faculties. This is all very interesting; and decibels sometimes have an effect upon my judgment. May we continue? Presentation of a Bill—

Mr. Kelley: On a point of order—

Mr. Speaker: I do not think there is a point of order. What point of order is the hon. Member seeking to raise?

Mr. Kelley: On a point of order, Mr. Speaker. The Chancellor of the Exchequer failed to record in his remarks the fact that the main instrument of inflation in the world today, particularly in this country, is the massive expenditure—

Mr. Speaker: Order. It cannot possibly be a point of order as to what the Chancellor failed to put in his statement. That is not a matter of order for the Chair.

Mr. David Stoddart: On a point of order. Arising from your statement, Mr. Speaker, about people who ask questions, am I to assume that in future any Member who gets up to ask a question to elicit information which may be of use to him in making a speech in a subsequent debate will be ruled out?

Mr. Speaker: Certainly not. I did not say that that governed my decision. I said that it was a factor which I took into account, particularly if it related very much to a debate which was about to take place. It is very much a matter of judgment.

BILL PRESENTED

CROFTING REFORM (SCOTLAND)

Mr. Secretary Campbell, supported by Mr. Alick Buchanan-Smith, presented a Bill to confer new rights on crofters and cottars to acquire subjects tenanted or occupied by them; to confer rights on crofters to share in the value of land resumed by landlords; to make further provision as to financial assistance for crofters, cottars and certain owner-occupiers of crofts; to amend the law with respect to common grazings: to


extend the powers of the Scottish Land Court; to make provision for pensions and compensation for members of the Crofters Commission; and for connected purposes: and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 53].

Orders of the Day — LAND TENURE REFORM (SCOTLAND) BILL

As amended (in the Standing Committee), considered.

Clause 3

EXTENSION OF PART I TO GROUND ANNUAL AND OTHER PERIODICAL PAYMENTS FROM LAND

4.53 p.m.

The Lord Advocate (Mr. Norman Wylie): I beg to move Amendment No. 1, in page 2, line 22, leave out 'This Part' and insert 'Sections 1 and 2'.

Mr. Deputy Speaker (Mr. E. L Mallalieu): With this we will take Government Amendments Nos. 2, 10 and 11.

The Lord Advocate: These amendments are all interrelated, as the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) may agree.

Mr. Ronald King Murray: Yes, I agree.

The Lord Advocate: These are drafting amendments which are consequential on the insertion of new Clause 4 in the Bill, which was inserted during the Committee stage. As originally drafted, Part I of the Bill dealt only with the future prohibition in deeds executed after the commencement of the Act of feuduties, and similar periodical payments, of more than a nominal amount. Clause 4, however, relates to the right to redeem existing feuduties, etc. This is an optional right of, for instance, a proprietor. The references which are being amended all relate to Part I in its original form, and the purpose of the amendments is simply to disapply these references from Clause 4. In other words, this is really a series of amendments consequent upon the introduction of the new clause.

Amendment agreed to.

Amendment made: No. 2, in page 2, line 23, leave out "it applies" and insert "they apply".—[The Lord Advocate.]

The Lord Advocate: I beg to move Amendment No. 3, in page 2, line 29, after 'some', insert 'continuing'.

Mr. Deputy Speaker: With this we will discuss Government Amendments Nos. 9 and 14.

The Lord Advocate: These amendments are all in the same vein. The purpose of Amendment No. 3 is to prevent the employment of a device to evade the limitation on the creation of perpetual obligations imposed by Clause 3. As the Bill is at present drafted a person selling, for example, a house could specify a periodical payment to defray some cost incurred by him, such as the cost of road works. Such a person might himself meet the initial cost by payment of a capital sum and then seek to recover his outlay, perhaps several times over, by imposing on the purchaser a periodical payment over a long period in the name of defrayal of "some cost related to the land". The insertion of the word "continuing" has the effect that a periodical payment may be imposed to defray only such costs related to the land as are themselves of a continuing or periodical nature; for example, the maintenance of amenity ground.
I should explain that a large part of this Bill is geared to preventing outlets or ways around the basic statutory provisions. I do not lay tremendous stress on the introduction of this one word, but I have been advised that it would be of advantage to the Bill if this series of amendments could be inserted for the reasons I have given. I am not suggesting that any developers would use these devices to get around legal provisions, but from a technical and drafting point of view it is advisable that this amendment should be incorporated in the Bill.

Mr. Ronald King Murray: I think that we should welcome this amendment, but I would ask the Government to reconsider the point that was made in Committee. Is it appropriate to have an omnibus clause somewhere in the Bill, excluding any device which is calculated to reinstate on land a continuing charge which is equivalent to feuduty? There is a lot to be said for an omnibus clause of that kind, but I am content on behalf of the Opposition to accept this amendment so far as it goes.

The Lord Advocate: I have considered the point of the hon. and learned Member. It is not an easy matter to decide, but

we have reached the conclusion that it is better to tie up these ends as we go along. This amendment ties up one of those ends, and I commend it to the House.

Amendment agreed to.

The Lord Advocate: I beg to move Amendment No. 4, in page 2, leave out lines 32 to 34.

Mr. Deputy Speaker: With this we will take Government Amendment No. 12.

The Lord Advocate: Amendment No. 12 is consequential upon Amendment No. 4. Both of these amendments are entirely drafting and, like the ones which I have just moved, are consequential on the addition of new Clause 4. The purpose of both of these amendments is to transfer the definition of "land obligation" from Clause 3 to Clause 5. Before the addition of Clause 4, the only reference to "land obligation" was in Clause 3, and it was appropriate in those circumstances that the expression should be defined in that clause. It is normal drafting practice that where an expression arises in a clause it is dealt with in that context. However subsection (8) of Clause 4 also refers to "land obligation", so it is appropriate to include the definition in Clause 5(3), which relates to Part I of the Bill as a whole. It does not make any substantial difference to the Bill.

Amendment agreed to.

5.0 p.m.

The Lord Advocate: I beg to move Amendment No. 5, in page 2, line 37, leave out 'after Whitsunday 1974'.
This is not a drafting amendment. It is a substantial amendment. Its purpose is to enable any proprietor of property who wishes to do so to take advantage of the provisions of what is now Clause 4 to redeem his feuduty at Whitsunday—that is, 15th May—1974. As the clause is at present worded, redemption of a feuduty is permissible at any term—Whitsunday or Martinmas, which is mid-November—after Whitsunday 1974.
However, the Committee made considerable progress with the Bill and it become apparent—I should like at this stage to acknowledge my obligation to the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) and his


colleagues as well as to my hon. Friends, for contributing to the speedy passage of the Bill in Committee—that the progress of the Bill would make it possible to advance the commencement date of the Bill from 1st May, which was at first thought the most probable date, to 1st April 1974.
This is a very significant change because it means that it will be possible for a proprietor to give the necessary one month's notice under subsection (3) on 15th May 1974 of his intention to redeem his feuduty at Whitsunday instead of having to wait another six months until Martinmas 1974, which is the middle of November. The amendment seeks to achieve this by deleting the words "after Whitsunday 1974". This is obviously a desirable amendment and one which I know that the House will support.

Mr. Ronald King Murray: I thank the right hon. and learned Gentleman for the kind words he has spoken, and on behalf of the Opposition I welcome the amendment. As he said, it is a substantial improvement on the Bill as originally drafted.

Mr. William Baxter: Now that that has been more or less accepted and agreed by both sides of the House, may I ask what powers are now vested in a superior that are not possessed by a local authority with regard to the planning and the development of a particular area? It should be clearly defined as to what the exact position is in law with regard to the feu charter making certain stipulations of one kind or another that are outwith the ambit of the Town Planning Act 1947 as it applies to England, Wales and Scotland. Some elaboration on this is necessary so that those who are owners of land and are seeking to establish feus will know clearly what their powers are vis-à-vis the powers vested in the local authority under the Town Planning Act.

The Lord Advocate: The hon. Member for West Stirlingshire (Mr. Baxter) raised this matter on Second Reading, and I was grateful to him for so doing. My mind goes back to the Planning Act 1969, which, as the hon. Gentleman knows, supercedes the 1947 Act. As the hon. Gentleman pointed out on Second Reading, it is perfectly true that local

authorities have wide powers with regard to planning control at all levels.
In one sense, I was very sorry that the hon. Gentleman was not a member of the Standing Committee, because I would have welcomed his contributions to the debates in Committee. One thing which has emerged from our discussions very clearly is that local planning authorities do not want to take over, though they have always had power to do so, the kind of detailed and minutiae of controls that small developments, particularly private developments, are subject to under feudal charter regulations.
I know the hon. Gentleman's sincere interest in this matter. I can assure him that I believe, the Government believe, and the last administration equally shared this belief, that there is a rôle for private planning control in this area. I personally should not like to see that go. It is the retention of these controls which has introduced some of the complications which hold up the comprehensive change which I think undoubtedly not only the two sides of the House but all parties in the House would like to see.
One thing which is clear is that local planning authorities feel that they have quite enough on their hands. This has emerged from the discussions we have had. They do not feel that they want to take on that kind of desirable planning control. This is one of the reasons why this administration, like the last, feel that it would be desirable to preserve some kind of planning control in the feudal system.
I do not know whether that exactly answers the hon. Gentleman's question. I am perfectly willing to give way so that the hon. Gentleman can follow this matter up, because I know of his genuine interest in the matter.

Mr. Baxter: It has not been my experience on a local authority and on a planning committee of a local authority that the authority was of the opinion that it was better that the land superior controlled these minor issues as against the local authority controlling them. However, if it is necessary in Scotland that a land superior should have this power why is it not necessary in England and in Wales?

The Lord Advocate: What we are all seeking here is a change from the person who exercises this type of control. We are all agreed that the autocratic nature of the existing system should be changed. This was in the last administration's White Paper. We entirely accept it. The criticism of the present system is not the fact that there is a rôle for private planning control, which is quite clearly laid out in the last administration's White Paper and in our own Green Paper.
What we have to look to here is—in the absence of a superior, when the change takes place who and by what means will these controls be enforced? I should be very glad to discuss this matter with the hon. Gentleman if he wishes to do so. All I am saying at this stage is that we feel, as did the last administration, that there is a rôle for private planning control. That cannot indefinitely be enforced by the superior, because we are all agreed that that is not the proper way to do it. The problem is finding some other way of enforcing it. In other words, as one hon. Member said in Committee, what we want to avoid is throwing the baby out with the bath water. This is worth preserving. Local authorities do not want it. They cannot cope with this. We all have to find some other way of enforcing it rather than by the rather autocratic whim, as one might say, of the superior as at present.

Mr. Norman Buchan: I do not wish, in making my maiden speech in detail on the Bill, to prolong the discussion on this point. The element in the last administration who was responsible for this aspect is undergoing a certain amount of rethinking on the second Opposition back bench this afternoon.
It is worth reminding the Lord Advocate that there will be a change in the nature of local authorities. The experience and views of the existing local authorities will not have relevance after 1975, and the rôle of the district authorities may have something to do with social planning in place of the individual planning.
The second point is this. This has been my predominant puzzle in my absence from the House over the past few

months where I feel I may have been a little like Banquo in Macbeth—
Never shake
Thy gory locks at me.
Why has it taken the Government three and a half years to make up their minds? If they were intent on following our lead in saying that private control should be retained, why has it taken three and a half years to solve the problem of how to do it?

The Lord Advocate: That was a problem the complexity of which was fully recognised by the hon. Gentleman. It was the kind of problem which prevented him from accepting the sort of change which I advocated on future feus. The hon. Gentleman may recollect that Mr. James Davidson, who formerly represented Aberdeenshire, West, recommended redeeming the existing feuduties.
I am pleased that the hon. Gentleman has raised this matter. These changes cannot be made until we are in a position to change the whole system. This is a difficult operation. I make no secret of the fact that I would personally have liked to do that but it is not through lack of will that we are unable to change the whole system.
Although one would have liked to be able to change the whole system at one go—nothing is more complicated than land law reform—there is a great deal to be said for progressing slowly, by stages. I have no doubt that this will be noted outside the House.
Apart from the other difficulties which have arisen, and the declared interest I have already made about trying to do the whole thing in one go, it would have been rather dangerous to try to do the whole thing in one gulp. This worries me a little because the right hon. Member for Kilmarnock (Mr. Ross) made a point about the change in structure of local government making some difference to the proposition set out in the White Paper.
Paragraph 32 of the previous Government's White Paper "A Plan for Reform" stated:
Although it is true that the rôle of such conditions has to some extent been taken over by modern planning and similar legislation, the Government believe that they are nevertheless useless, as a complement to statutory controls, in enabling citizens to safeguard the


value, amenity or usefulness of their property and in helping to achieve harmony among neighbouring proprietors on detailed questions of common responsibility for the upkeep of property.
I am positive that if the hon. Gentleman was standing at this Dispatch Box he would now be saying exactly the same thing. I do not believe that it would happen, but if there was a change of Government at the next General Election I hope that a Labour Government would not scrap the system of private planning control inherent in the feudal system. I will not be here then. The machinery, the process, and the people who enforce it may be altered, but we must not, for Heaven's sake, change the basic principle.

Amendment agreed to.

5.15 p.m.

The Lord Advocate: I beg to move Amendment No. 6, in page 3, line 2, leave out 'redemption is required' and insert:

"the feuduty is to be redeemed.".

Mr. Deputy Speaker: With this amendment it will be convenient to take Government Amendments No. 7 and No. 26.

The Lord Advocate: These are essentially drafting amendments which deal with conveyancing technicalities. It is incorrect usage to refer to a debtor as "requiring" redemption of the creditor, because it is the debtor who does the redeeming. The amendments are simply drafting improvements intended to give effect to the idea that the proprietor who wishes to make use of the provisions of Clause 4 of the Bill is not "requiring redemption" but is rather making known his intention to redeem.

Mr. Ronald King Murray: I wish to put forward a point which arises from doubts which have been expressed to me. These amendments qualify Clause 4 insofar as proprietors are seeking to redeem feuduties. This throws us back to the definition of a proprietor as contained in Clause 5 of the Bill. From my reading of that clause "proprietor" in this sense is clearly contrasted with "superior". I should like the Lord Advocate to confirm that that is his reading of the clause.
The right hon. and learned Gentleman will appreciate that a layman reading it, particularly when reading about the defi-

nition of a proprietor, might take it to also apply to a superior. There is some doubt among laymen whether the intention of Clause 4 is to allow superiors to have an option to require their vassals to redeem feuduty.

The Lord Advocate: That is not the intention, nor is it my reading of the clause. I shall read the report of what the hon. and learned Gentleman has said, and if there is anything in the point it will be taken up by letter.

Amendment agreed to.

Amendment made: No 7, in page 3 line 4, leave out from 'proprietor' to 'pay' in line 6 and insert:
'redeeming a feuduty under this section shall, at the term of redemption,'.—[The Lord Advocate.]

The Lord Advocate: I beg to move Amendment No. 8, in page 3, line 20, leave out

'be bound, if so required by the proprietor, to.'

Mr. Deputy Speaker: With this amendment we can discuss Amendment No. 27.

The Lord Advocate: Amendment No. 27 is an appropriate amendment to group with Amendment No. 8, and I am obliged for your suggestion, Mr. Deputy Speaker.
As at present drafted, Clause 4(6) prescribes that:
the superior shall be bound, if so required by the proprietor, to grant a receipt and discharge …
on redemption of feuduty. The purpose of these amendments is to put a statutory obligation on the superior to grant the receipt and discharge in every case. I have no doubt that, under the present wording of the clause, most proprietors would in any event ask or require the superior to grant a receipt and discharge, but these amendments would remove an unnecessary, or what might be thought an unnecessary, complication from the proprietor's point of view.

Amendment No. 8 has the effect of putting an absolute obligation on the superior, and Amendment No. 27 makes a consequential adjustment in the wording of the form of notice of redemption. A proper discharge of redemption money is in the interest not only of the proprietor who redeems the feuduty, but also of future owners of the property, because the recording of the receipt and discharge


will have the effect of making the redemption of feuduty binding on all persons having interest.

Mr. Ronald King Murray: This is an improvement on the clause as drafted. In view of the fact that the Bill is to be strengthened by requiring a superior to grant the necessary discharge and receipt, can we have a reassurance that vassals will not find that they have to pay a comparatively small capital sum, say about £30 or £40, on redeeming feuduty, only to have a substantial bill from the superior's solicitors—say, £100—for doing it. The amendment helps to counter any flavour of exorbitant charges on the vassal. Perhaps the Lord Advocate will tell us what is the Government's thinking about these expenses.

The Lord Advocate: I am subject to correction on this, and perhaps I should hesitate to say anything. At the moment my understanding is that the probable cost for registration would be about £1. It is not a large sum. It is clearly desirable that when a change of this kind is being made the change should go on the register, as the hon. and learned Member will appreciate. In an earlier amendment, considered in Committee, he suggested a 50p limit. I remember that we looked at this, and the information I had was that on current charges it would be about £1. It would not be excessive in any event.

Amendment agreed to.

Amendment made: No. 9, in page 3, line 39, after 'some', insert 'continuing'. [The Lord Advocate.]

Clause 5

TRANSITIONAL AND SUPPLEMENTARY PROVISIONS RELATIVE TO PART I

Amendments made: No. 10, in page 3, line 44, leave out 'this Part' and insert 'section 1, 2 or 3'.

No. 11, in page 4, line 8, leave out 'this Part' and insert 'section 1, 2 or 3'.

No. 12, in line 15, at end insert:
' "land obligation" has the meaning assigned to it in section 1(2) of the Conveyancing and Feudal Reform (Scotland) Act 1970; '.—[The Lord Advocate.]

Clause 6

PROPERTY LET UNDER LONG LEASE, ETC., NOT TO BE USED AS PRIVATE DWELLING-HOUSE

The Lord Advocate: I beg to move Amendment No. 13, in page 5, line 1, after 'Act', insert:

', "lessor" and "lessee" mean any person for the time being holding the interest of lessor or lessee (as the case may be), and '.

Mr. Deputy Speaker: With this we can also discuss Government Amendments Nos. 20 and 21.

The Lord Advocate: These are basically drafting amendments. They are designed to spell out for the avoidance of doubt what is meant by these technical terms. There is an unwritten rule—there is no statutory sanctity behind it as far as I know—that when dealing with very short leases one talks in terms of "landlord" and "tenant" but when dealing with longer leases one tends to use the expressions "lessor" and "lessee". [Interruption.] Why? It is one of those things. I would not, in my last months or years in this House, want to change practices that are time-honoured in this way. It is precedented, and I know that that will appeal to Labour Members. It is the language used in the Long Leases (Scotland) Act 1954 when a somewhat analogous situation arose and a somewhat similar solution was proposed.

Amendment No. 13 provides definitions for "lessor" and "lessee" for the purposes of Part II. This is to remove any doubt which might arise about the application of Part II provisions to a person who is not the original lessor or lessee in a lease. It could happen—I understand it has—that the term "lessor" and on occasions the term "lessee" will be restrictively interpreted to refer only to the original contracting parties.

In these circumstances it seems wise to put the matter beyond doubt and the definition in the amendment makes it clear that the provisions of Part II apply to anyone who, for the time being, enjoys the rights of lessor or lessee under a lease executed after the commencement of this Act. That is irrespective of when he acquired the right. The other two amendments carry that definition forward to Clause 8.

Mr. James Dempsey: I want to raise a point in connection with the words used by the Lord Advocate. I wonder whether the Lord Advocate and the legal profession have any regard for the layman who is sometimes called upon to consider documents of this nature. I would have thought that "lessor" and "lessee" mean little to someone like myself who is not a lawyer while they mean quite a lot to a lawyer. I often wonder whether these words are used so that we might engage lawyers to interpret them for us.
Does the Lord Advocate not realise that while this terminology may have been used for hundreds of years there are other words and other expressions which have been altered during this time and so that a modern-minded person can understand the implications of a sentence containing such terminology? Why should this change not take place in legal terminology? Sometimes there are occasions when a document has been signed and it is the dickens of a job trying to interpret the names represented on it and to see what type of person the owner is, possessed or dispossessed. I have been a justice of the peace for 20 years and that sort of work is the most difficult I have experienced. I would far rather try the most complicated case in a court than try to understand some of the terms in these documents.
The Lord Advocate has indicated that he is leaving the House. We are sorry about that because he has always been the essence of courtesy and kindness. He might have gone down in history had he eliminated these words and replaced them with terminology understandable to the average lay person.

Amendment agreed to.

Amendment made: No. 14, in page 5, line 5, after 'some', insert 'continuing'.—[The Lord Advocate.]

Clause 7

CONSEQUENCES OF USE AS DWELLING-HOUSE OF PROPERTY SUBJECT TO LONG LEASE

The Lord Advocate: I beg to move Amendment No. 15, in page 5, line 30, after 'lease', insert

'executed after the commencement of this Act.'

Mr. Deputy Speaker: With this we can also discuss Amendments No. 16 and No. 18.

The Lord Advocate: Although these amendments may not be strictly, necessary the view was that they would make the provisions more clear, particularly if any of these clauses were taken out of context. This is exactly the point that the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) was making. We want to make clear what the provisions of a Public General Statute are. If hon. Members will look at Clause 6(1) they will see spelled out there in the clearest possible terms—and this is the basic provision of Part II—what are the limitations on long leases for residential use. It says:
It shall be a condition of every long lease executed after the commencement of this Act.
These three amendments, one relating to Clause 7 and the others to Clause 8, are meant to spell out in the clearest possible terms that the provisions relate only to arrangements made after the commencement of this Act. Although they may not be strictly necessary and the provisions would be judicially interpreted in the way we intend them to be, it is desirable that we should spell matters out in these clauses in the interests, for example of the hon. Member for Coatbridge and Airdrie and the kind of point he made.

Amendment agreed to.

Clause 8

MODIFICATION OF SECTION 7 WHERE LEASE SUBJECT TO SUB-LEASE OR HERITABLE SECURITY

Amendments made: No. 16, in page 7, line 17, after 'sub-lease', insert
'executed after the commencement of this Act'.

No. 18, in page 7, line 17, at end insert 'so executed'.—[The Lord Advocate.]

5.30 p.m.

The Lord Advocate: I beg to move Amendment No. 19, in page 7, leave out line 18 and insert—

'(2) The pursuer in an action under section 7 of this Act shall give such intimation thereof as the court may direct—'.

Mr. Deputy Speaker: With this we can also discuss Government Amendment No. 22.

The Lord Advocate: These amendments relate to technical matters of court procedure. As drafted, Clause 8(2) might possibly give rise to some doubt. It will be appreciated that this is a Bill of considerable complexity and we are always trying to simplify matters. I am not at all sure that we have finished that process.
What we are trying to do in this Bill, as the hon. Member for Renfrew, West (Mr. Buchan) will understand, since his Bill in 1970 was complex enough, is to keep it as clear and as simple as possible.
Two doubts could arise on Clause 8(2) as it stands. The first is whether, in a case where the lease is subject to a sublease or a heritable security, an action of removing under Clause 7 could be brought at all if all the persons listed in subsection (2) had not received intimation of the action. For example, this could arise if some of them were untraceable. The second problem is whether intimation of the action was of itself sufficient to give the person receiving the information the right to appear and plead in the action, or whether the intimation was merely intended to afford that person an opportunity to initiate his own arrangements for safeguarding his own position.

The amendments are designed to meet these two possible difficulties. I am not saying that they would necessarily arise, but they could conceivably arise. Amendment No. 19 removes the first doubt by giving the court a clear discretion about the method of intimation to be adopted. This is always a satisfactory course to follow. Where there is doubt about tracing interested parties it is always desirable to give the court discretion as to what should satisfy the requirements of intimation.

Amendment No. 22 deals with the second possible difficulty by stating quite explicitly that a person having any of the interests listed in the subsection has the same pleas open to him as has the defender in the action. This whole clause is highly technical, and I extend once again the invitation which I extended to the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) in Committee—that if he should wish to discuss these amendments to the clause with me at a later stage, I would be glad to do so.

Mr. Ronald King Murray: I welcome these amendments. I think they are a definite improvement.

Amendment agreed to.

Amendments made: No. 20, in page 7, line 28, leave out from 'to' to 'lessee' in line 29 and insert 'be the'.

No. 21, in page 7, line 30, leave out second 'of' and insert 'the'.

No. 22, in page 7, line 31, at end insert:
'and any such creditor or lessee as aforesaid shall, subject to the provisions of this section, be entitled to plead in the action any defence which could be pleaded by the defender in the action,'.—[The Lord Advocate.]

The Lord Advocate: I beg to move Amendment No. 23, in page 7, line 34, at end insert 'derived from that lease'.

This amendment stands on its own. Its purpose is clarification. It does not alter the basic meaning of Clause 8(3), the effect of which is to ensure that the defence provided under Clause 7(4)—namely, that residential use of a long lease had been approved by the landlord—is to be available only to persons having the actual right of occupancy of the residential property in question.

This meaning is already sufficiently apparent in the context of Clause 8 taken as a whole, but the difficulty is that if subsection (3) is quoted out of context in the form of notice to terminate residential use—and in Schedule 3 there is reference to the quoting of Clause 8(3)—it might not be quite so apparent. Amendment No. 23, therefore, is really a drafting amendment to make the provision perfectly clear, even though it is only quoted out of context in the context of the schedule to which I have referred.

Amendment agreed to.

Clause 17

PROVISIONS FOR CONTRACTING OUT TO BE VOID

The Lord Advocate: I beg to move Amendment No. 24, in page 12, line 4, after 'constituted', insert:

', which is made after the commencement of this Act.',

This amendment again is made necessary by the addition to the Bill of Clause 4, which gives proprietors the right


to redeem existing feuduties. Apart from that, the Bill was concerned only with future feuduties. The purpose of Clause 17 is to prevent contracting out of the provisions of the Bill. This is apt and desirable in relation to the Bill as originally drafted, because the generality of these provisions relate to future feuduties, long leases, and so forth. It is not entirely apt, however, in the new context of Clause 4, and it is to make perfectly clear that this provision relates to arrangements made after the commencement of the Act that this small amendment, which is essentially drafting and consequential on the new Clause 4, is made.

Amendment agreed to.

Schedule 1

FORMS PRESCRIBED UNDER SECTION 4

The Lord Advocate: I beg to move Amendment No. 25, in page 13, line 9, leave out 'and designation'.

Mr. Deputy Speaker: It will be convenient to consider at the same time Government Amendments Nos. 28, 29 and 30.

The Lord Advocate: These four amendments are designed to simplify the provisions of the Bill in relation to the redemption of feuduties. It is felt unnecessary to require the designation of a superior or a proprietor to be included in any of the notices or statements prescribed in the Bill. Such a requirement might cause some confusion, particularly to proprietors acting without legal advice, and we have been anxious to try to gear this legislation in such a way and on such a plane that it will be possible for proprietors to take advantage of the provisions of the Bill without seeking technical legal advice.

Amendment agreed to.

Amendments made: No. 26, in page 13, line 12, leave out 'require the redemption of' and insert 'will redeem'.

No. 27, in page 13, line 16, at end insert:
'On such redemption, a receipt and discharge is required in terms of that section.'.

No. 28, page 13, line 22, leave out 'and designation.'—[The Lord Advocate.]

Schedule 2

STATEMENT REFERRED TO IN SECTION 5(1)(b)

Amendment made: No. 29, in page 13, line 44, leave out '(designation)'.—[The Lord Advocate.]

Schedule 3

FORM OF NOTICE PRESCRIBED UNDER SECTION 7

Amendment made: No. 30, in page 14, line 12, leave out ' and designation'.—[The Lord Advocate.]

Schedule 4

AMENDMENTS OF LAW RELATING TO REGISTRATION OF LEASES

The Lord Advocate: I beg to move, Amendment No. 31, in page 15, line 15, leave out 'May' and insert 'April'.
I think that this amendment is self-explanatory. It is consequential upon the amendment made in Committee to Clause 20(2) by virtue of which the date for the coming into operation of the Bill was advanced from 1st May to 1st April 1974. The effect of the amendment is similarly to advance to 1st April 1974 the date at which registration of a registerable lease will compel the real right of a tenant and establish a preference over the right of any party to an unrecorded lease granted after 1st April 1974.

Amendment agreed to.

Motion made, and Question proposed, That the Bill be now read the Third time. [Queen's Consent and Prince of Wales's Consent (in respect of the Principality and Stewarty of Scotland) signified.]

5.39 p.m.

Mr. Ronald King Murray: This is another milestone on the long and tortuous road to abolition of feudal tenure, The milestones have been many, and measure many dreary miles. We must, nevertheless, welcome progress, although it has been slow.
In the Bill we witness a remarkable about-turn by the Government, which I welcome. They started with the view that it would be impossible to allow the


kind of right of redemption now embodied in Clause 4 until we have arrived at a formula acceptable to both sides in the process of completely abolishing feudal tenure. They have seen that that is not necessary.
I welcome the initial step that has been taken, but it would be wrong if I did not express extreme disappointment that we are not at the stage of the full abolition of feudal tenure. The sooner that stage can be reached, the happier the Opposition will be.
Although we have made progress—very slow progress towards a goal that both sides of the House accept as desirable, we must acknowledge that even a Bill of this kind creates certain problems, one of which has been drawn to my attention since the Committee stage. I do not put it foward as a serious obstacle to progress, but it envisages the kind of difficulty that may crop up between the enactment of the Bill and the abolition of feudal tenure. The moral I draw from this example is that the shorter that interval can be made the better it will be for all concerned and the less injustice is likely to be generated.
The example is that of retired people of modest means, especially self-employed persons, who have chosen to ensure their income for retirement purposes by the puchase of feuduties. I imagine that only a handful of people in Scotland are in that position, but they are a handful who have served the community well and who, on the best advice they obtained at the time, took the course of pulling their money in that very secure, as it appeared, investment of feuduties.
Such people retain security; the Bill does nothing to take it away from them. But let us take the case of a person with a moderate income of about £500 or £600 a year from his feuduties. Suppose the Bill is enacted as it stands and half his vassals decide to exercise their right of redemption and the other half do not. He will be left with a very unsatisfactory capital sum from which he derives his income. It is possible that, in such cases a measure of social injustice will result.
My hon. Friend the Member for Renfrew, West (Mr. Buchan) took this subject very seriously. He had in mind various proposals, which he may tell us about, for

overcoming that sort of difficulty. One solution would be for the Government to have power to step in and take over feudal rights. Where hardship would otherwise be created, they could take an intermediate position as an honest broker and enable such cases to be dealt with fairly and equitably. We cannot do that in the Bill, but this seems to me to foreshadow the kind of difficulties we may well find are generated by the Bill. It is not a reason for not continuing with the Bill, but it is a reason for every haste in getting on with the job, in finally abolishing feuduty and replacing it with a modern form of land tenure that meets the reasonable requirements of all the interests in land.
Having welcomed the Bill, I want to sound a more sombre note. In Committee the Lord Advocate undertook to inform hon. Members of the effect that various multipliers might have, following through the formula embodied in Clause 4 for redemption of feuduty. He kindly did this, up to a point, but he did it belatedly. It may be that that is a result of the bringing forward of the Report stage and Third Reading to today. The result is that my hon. Friends and I received only by hand delivery today the letter embodying the various multipliers. The information is useful, but it cannot be used, as Opposition Members desired to use it, for the purpose of consulting local interests to discover the general feeling. That obviously cannot be done in a way that can affect the passage of the Bill through this House. Only if my hon. Friends have friends in another place will anything come of such consultations. It is unfortunate that the perfectly reasonable desire to get the Bill through quickly has led to this result.
I also believe that the Lord Advocate said in Committee that he would do a little more arithmetic than he has done. I think he indicated that he would work out examples with typical feuduties so that the public could see what the impact would be. I hope that he will do so, because there is not the same argument about urgency, as the Bill has further stages to go through in another place. It would be very satisfactory if, before the Bill appeared there, the other parts of the right hon. and learned Gentleman's undertaking were fulfilled. It would be of great assistance to the general public to know


what their rights are to be under the Bill.
In Committee my hon. Friends emphasised the desirability of the general public's being fully informed of the new rights which vassals are to have under Clause 4. I think that my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) in particular made that point. I repeat what was said in Committee, namely, that the Opposition are most anxious that the public should know that as feuars they are entitled to redeem their feuduties when the Bill is enacted. It should be known that they can do it and how they can do it. It is also important that feuars should realise that no great expense is involved. That is important, because many feuars are old-age pensioners, people who are infirm and living on their own, who are just a bit afraid of bureaucracy, people who will take no action unless steps are taken to bring the advantages of the Bill to their notice.
I welcome the Bill, and urge the Government to proceed apace with the final abolition of feudal tenure.

5.47 p.m.

Mr. Buchan: I made a maiden intervention on the Bill earlier, but in a sense this is my maiden speech on it. It was rather difficult to wait at a distance while the Bill went through. I think that it would be appropriate if I said a word or two now, because I gave up three years of my life to the topic. The Government have made a mess of the three years which I left to them.
Today the Lord Advocate made much of what he referred to as difficulties mentioned by the previous administration—in other words, mentioned by me. He also made much of them in Committee. But there is a mighty difference—a difference of three and a half years. That which was seen as difficult when we were moving at great speed into the beginning of our implementation of these provisions is rather different after three and a half years have passed. I cannot equate any difficulties I might have mentioned then with the difficulties that the right hon. and learned Gentleman has mentioned now, three and a half years later.
I left the Lord Advocate with only one main problem to solve—how to deal

with private land conditions when a feudal superior is abolished. I accept that it is a big problem, but it is one of principle. The Government do not require three and a half years to make up their mind on a principle. I do not believe that the Civil Service requires three and a half years to work out the details. Therefore, I cannot accept that there is such an equation as is suggested or that there is in it a proof of the Government's intention to carry out the abolition of feudalism with speed, as they said in their election manifesto.
It is an ironic comment on history that today we are discussing the abolition of feudalism when earlier this afternoon we saw another demonstration of one of the final crises of capitalism. It is an extraordinary concurrence of events.
In the debate in 1970, the present Secretary of State for Scotland said:
Because feuduty is at present an integral part of the system it cannot disappear altogether, except as part of a major reform. We shall ensure that, in this complex field, reform is carried out in a fair and orderly way.
That was said in the course of a speech when the present Secretary of State was lambasting me, as to a greater or lesser extent and with greater or lesser effectiveness all hon. Members opposite did, because I was not then abolishing all feuduties. The right hon. Gentleman said that he accepted that feuduty was such an integral part of the system that it could be abolished only as part of a major reform, and that the Conservatives would ensure that that was done in an orderly way. In fact, they have done precisely the opposite. By introducing Clause 4 they have abolished feuduty without continuing the major reform.

Mr. Speaker: Is the hon. Gentleman complaining about what is not in the Bill?

Mr. Buchan: On the contrary, Mr. Speaker; this extremely important provision—Clause 4—was introduced in Committee. It offers the possibility of redeeming—or as we would say in our vernacular, North of the Border, abolishing—feuduty by payment. It is very much in the Bill, although I am not surprised by your surprise because it was not in the Bill when first introduced to the House.

Mr. Speaker: It sounded as though the hon. Gentleman was complaining about something not being in the Bill.

Mr. Buchan: I am not complaining at all; I am drawing attention to the fact that that which it was said was not possible to introduce except as part of a reform, and therefore the abolition of the whole structure, has in fact been so introduced. To add to your astonishment, Mr. Speaker, is the fact that it was not even introduced before you, but in the late stages of Standing Committee. I make the comment because we are left with the important fact that Clause 4 is included so that the abolition of feuduty is included but the system itself remains.
It was to the system that I referred when, three years ago, I said of the Conservative Party:
What they want to do is to wipe out the system of feuduties by some kind of compensation, while retaining the superiority written into the system. What they say is that they will wipe out the cash relationship, but the whole injustice of feudalism will remain. This is the position at which they have arrived. It is one which I find slightly contemptible and which should, perhaps, be dismissed."—[OFFICIAL REPORT, Scottish Grand Committee, 19th February 1970; c. 67–71.]
I still find it slightly contemptible and it should, perhaps, be dismissed.
In other words, at that time it was possible to say that the Conservatives Intended to abolish the cash aspect but retain the superiority that is written into the system. That is what they have done by the Bill, and there are one or two comments that must be made. They have not made clear what the future is to be. They leave in the right of the feudal superior and they have not solved the basic problem by a fresh approach, by deciding whether there should be private conditions—and, if so, how—or social conditions. That is where there must be an element of re-thinking.
After the kind of statement that we had earlier this afternoon, for example, with the comments made by the Chancellor about land and earlier remarks about the unacceptable face of capitalism, there is a re-thinking on the part of those who were closely involved in the Labour administration on the question whether we were right to say that conditions should remain in private hands instead of passing into public and democratically-controlled

hands. That is an important question to which we require an answer.
In Committee the Lord Advocate said:
If it is as simple as they say, why did not the last administration do it in 1970? … One could simply abolish the system at a stroke"—[OFFICIAL REPORT, First Scottish Standing Committee, 4th December 1973; c. 126.]
That was an unfortunate choice of phrase, but I shall not pursue it, for the Prime Minister has already suffered sufficiently for it.
The Lord Advocate knows that the pledge was to abolish feudalism. The Government have had three and a half years to do it, but they have failed utterly. They have left vassals having to pay to avoid payment of feuduty, but the vassal has gained nothing more for that payment in terms of control over his own land.
For instance, what happens to a vassal who owns an acre on which he redeems feuduty? Is he then entitled to sell half of that land? The feu and the control will remain in the hands of the superior. The basic right to do with the land what he likes, within planning permission, is not to be given to the vassel; that freedom has not been extended to him.
We all received the figures this morning. I understand that they came from the Under-Secretary, who attempted to give an analysis to show the equivalent cost of redemption over the past few years. The figures varied between 11 and eight times the annual feuduty. That has to be set against the fact that we are in a period of roaring inflation and no one in his senses would want to redeem a feuduty when the cost is drastically diminishing from year to year. Anyone would be stupid to do so when inflation is roaring at more than 10 per cent. and when the pound has fallen by more than 20 per cent. in the past two years and he cannot get anything in the way of improved conditions.
I vividly remember the present Secretary of State saying that he was champing like a warhorse to abolish feuduties. After three and a half years, he is still champing. We achieved something in 1970, however—the setting up of the Land Tribunal, which could cope with existing conditions.
When I introduced that measure, the present Lord Advocate accused me of


expropriation. He was quite right. I took without compensation the right of the feudal superior to demand money in return for waiving certain conditions, and in that sense I was an expropriator. But it was a form of expropriation of which the Scottish people approved. That is why they did not fight it. Those Opposition Members who are afraid of radical policies should remember—

Mr. Speaker: The hon. Member is going rather wide now. This is a narrow debate.

Mr. Buchan: It is my maiden speech on the Bill, Mr. Speaker.
What efforts have the Government made to publicise the use of the Lands Tribunal? As I understand it, between 90 and 100 cases have been brought before it, but certainly more were expected. I understand that one of the difficulties is the time taken to deal with cases, but there should be no need for delay.
This was meant to be a simple and direct form of the use of the Lands Tribunal, and it was meant to wipe out the sort of case that was discussed in Committee when we heard of the instance of Lord Vestey and others using their powers to determine whether hotels should have licences. If people in Scotland do not know of this method, the legal profession in Scotland is failing to advise clients that the system exists and may be used without recourse to the legal profession.
I hope that the Lord Advocate, who is the leading Law Officer for Scotland, will make it known to members of the legal profession that we expect them to advise their clients that they do not need to enter into negotiations about the cost of a waiver but that a waiver can be achieved without the payment of compensation, at the Lands Tribunal. In the case described in Committee, Lord Vestey and similar people used the system as a means of preventing competition to their own enterprises.
In giving my blessing to this minuscule mouse of a Bill, which takes us half an inch further forword on the road to the abolition of feudalism, I ask the Lord Advocate to do all in his power to ensure that the importance of the Lands Tribunal is made known to his profession and to the people of Scotland, who are suffering,

and perhaps will continue to suffer after the passage of the Bill, from the worst aspects of feudal superiority.

6.11 p.m.

Mr. J. Grimond: I thank the Lord Advocate for dealing with the question of skat. We had a short exchange on this matter on Second Reading and, in case you think I am out of order, Mr. Speaker, I would point out that there is reference to skat in line 25 of page 2 of the Bill.
Although I always speak with a certain amount of diffidence about anything to do with the law, particularly Scottish law, I understand that those who pay skat will have the opportunity of redeeming it on certain terms. I agree with the hon. Member for Renfrew, West (Mr. Buchan) that it may be a very bad bargain to redeem one's feu in times of inflation, but as skat is founded on such peculiar calculations as the price of lispunds of butter, which may arise now that we are in the Common Market, it may not be such a bad bargain to redeem skat.
I thank the Lord Advocate because, since I have been a Member, he is practically the only Lord Advocate who has addressed his mind seriously to Udal law and the vestiges of Scandinavian law which exist in my constituency. I am glad to think that this totally indefensible impost may be in its last days.

6.13 p.m.

Mr. Tam Dalyell: I should like to put to the Lord Advocate a question which we are all being asked in our constituencies, namely, what next? The Lord Advocate will not be in the next Parliament and therefore I wonder whether he will throw away that caution which behoves Law Officers and let us into the secret of what he would recommend as a timetable for the next stage—

Mr. Speaker: Order. I do not think that it can possibly be in order on Third Reading to ask what further legislation is contemplated.

Mr. Dalyell: Having put the question which we are being asked, I shall not pursue the matter.

6.14 p.m.

Mr. Dempsey: I have been asked to raise certain matters. The Bill refers to the abolition of feuduty, which plainly


will take some time. What will be the Lord Advocate's attitude in the interim period? Chartered surveyors advise me that when dealing with a feuduty that was fixed some time ago a general settlement is based on 10 years' capitalisation of the amount of the feuduty.
Some documents were handed out to one or two Members who served on the Standing Committee. I am sorry that I did not have the opportunity of studying them. In one document the Lord Advocate mentioned a formula of 8–11 years capitalisation. First, does he look favourably on the practice, which is being adopted more and more by chartered surveyors, of buying out the feu on a capitalisation of 10 years?
Secondly, once feuduty has been abolished what will happen to the feus owned by local authorities? One of my town councils owns quite a number of feus in the town and draws revenue from them. Authorities purchased the feus at the expense of ratepayers. They wish to know whether, in the event of abolition, they will receive compensation. I should be grateful if the Lord Advocate would advise me on that matter.
To err on the safe side, I draw the Lord Advocate's attention to the fact that in the County of Lanark there are feuars who suffered drastically as a result of the old legislation when the feu ran out and when the property or structure erected on the feu reverted to the superior. Owner-occupiers of houses which had been built at their expense found that their houses were in danger of reverting to the superior—to the land owner, for example—and they were on the brink of losing their all.
Have adequate steps been taken in the legislation to ensure absolute security for property owners against avaricious superiors who, when the lease runs out, take over the property on the feu? This is a burning issue in my part of Scotland and I should like to be assured that there is no possibility of any superior being in such a legal situation that he could confiscate the houses of people who had spent their lives in them.

The Lord Advocate: An amendment was tabled in Committee by the hon. Member for Dundee, West (Mr. Doig) on the irritancy of a feu, to which the hon.

Member for Coatbridge and Airdrie (Mr. Dempsey) has just referred. I had hoped that it would be possible, in the de minimis area in which we are operating with the 1p feuduty, to abolish the right of irritancy. I was advised, and I have satisfied myself, that we cannot do that while retaining the feuduty system. Until we can make the major change we cannot make changes of this kind.
We introduced a provision in the Bill whereby the period of two years in which one had the right to irritate the feu after two years non-payment of feuduty, which was incorporated in a statute of 1597, was altered to five years. I gave the assurance that by that time the present administration or their successors on this side of the House would be able to abolish the system. Therefore, for practical purposes, the problem of the irritancy of the feu with regard to the nonpayment of feuduty has been solved.
We are dealing with the land law of Scotland. The Scottish system of land tenure extends back almost for a millennium. No one who knows anything about it would suggest that one could readily or carelessly make changes in the system. The matter must be carefully considered before changes are made. As I said from the benches opposite when we discussed the 1970 legislation, the terminology does not appeal in this day and age, but not everything about the system of land tenure is bad. It has many advantages over any system of long leasehold tenure which obtains elsewhere in the United Kingdom. There are many aspects of the feuing system which recommend it.

Mr. Robert Maclennan: Mr. Robert Maclennan (Caithness and Sutherland) rose—

The Lord Advocate: I shall give way later to the hon. Gentleman. I know that he is interested in this matter.
We came to the conclusion some years ago that the system had to be changed. The hon. Member for Renfrew, West (Mr. Buchan) never accepted that. When, in Committee in 1970, I said that on the Opposition bench, and when my right hon. Friend the Secretary of State said the same, no one believed it. The hon. Member for Renfrew, West kept on saying that it was not true. Even today, he still casts doubt on the intention of the Conservative Government to abolish the


system. I use "abolish" advisedly. I do not mean to modify, change or reconstruct but to abolish the system of land tenure known as feudal tenure. We have all along been committed to that policy.
The hon. Gentleman will remember that in Opposition we had a working party looking into this matter long before the 1970 Bill was introduced. We have been among the first to recognise that the 1970 legislation was an invaluable contribution to resolving the problems of the Scottish feudal system, but it in no way fundamentally altered it. It made provision for the allocation of feuduties, but that is a technical matter that I need not go into now. It imposed on the Lands Tribunal for Scotland a discretion to vary or quash land conditions in the exercise of an equitable jurisdiction. The Opposition supported the Labour administration in that.
As did the hon. and learned Member for Edinburgh, Leigh (Mr. Ronald King Murray) in Committee, I should like to express on behalf of the Government my appreciation of the work done by the Lands Tribunal for Scotland, in particular by its President, a leading Queen's Counsel of the Scottish Bar, who has made an enormous contribution. The hon. Member for Renfrew, West said that more should have been done, but the work of the president of the tribunal merits an assessment on a four-fifths basis. It is very nearly full-time. As I said in Committee, it will abviously go full time. I congratulate the hon. Gentleman for the legislation which he introduced, which was valuable. The machinery which has been implementing it has had full support from the present administration, and I know that great care has been taken about the nominations that have been made to the membership of the tribunal.

Mr. Buchan: The right hon. and learned Gentleman referred to my doubt of the intention to abolish the whole system and said that a working party had been in existence before 1970. The documents from that working party, as published by Conservative Party headquarters and which I quoted at great length in the Second Reading debate on the 1970 Bill, made us doubt it. I quoted today what the Secretary of State said at that time—that feuduty could not be abolished without abolishing the whole system. In fact, that has been done. What I predicted in

1970 has taken place. I am pleased about the inclusion of Clause 4, but what I predicted then in doubting the intention is exactly what has taken place.

The Lord Advocate: The hon. Gentleman is wrong. We have not abolished feuduty. We cannot abolish feuduty. We have retained the 1p nexus for the very reasons the hon. Gentleman gave. I do not want to introduce controversy, because both sides of the House are at one. If the hon. Gentleman is suggesting that we could have done this, and if he is saying that if the Labour Government had been returned at the last election they would have abolished the system in 1971—

Mr. Buchan: Not before the end of 1971.

The Lord Advocate: Yes. The hon Gentleman, who handled the Committee stage of the 1970 Bill, was given two invitations, one of which came from myself about the 1s. feuduty. He said that there was a danger of a run into long leasehold tenure if we did that. I have always doubted that, but it is a difficult view and I, no doubt, have had the same advice that he had when he was Minister. Secondly, Mr. James Davidson, who was at that time the Member for Aberdeenshire, West, inserted a new clause advocating the redemption of existing feuduties. For the same reasons the hon. Member for Renfrew, West said that that could not be done until we were able to change the system as a whole.
Basically, I accept that that is right. If the hon. Gentleman, or his right hon. Friend the Member for Kilmarnock (Mr. Ross), thought at that time that within a year or 18 months there would be a major reform, there was no reason for rejecting either of those two propositions. There would not have been a run into long leasehold tenure in such a short space of time. Had that opportunity been taken about 11,000 people a year since then who are paying feuduty today would not be paying it.
Governments always tend to be overcautious, and I well understand that. We are all under the same pressures. I do not believe that within 12 or 18 months there would have been a risk of a run into long leasehold tenure in Scotland following a provision for a redemption of existing feuduties to a nominal value


and following a restriction of future feu-duties to 1s. nominal value. That is what we are doing here. With the lapse of time we have been able to work out the highly complicated statutory provisions to deal not only with long leasehold tenure but also with the associated problem of standard security. The right hon. Gentleman cannot claim that as a reason for not doing it in 1970. He had not spotted it then either.

Mr. William Ross: I am sorry that I have not heard the earlier part of the debate but, for obvious reasons, I was committed elsewhere. The right hon. and learned Gentleman misses the point that the Bill we are dealing with today is not the Bill that we dealt with on Second Reading. The redemption of existing feuduties was argued against on Second Reading because it was said that it could not be done. It suddenly appeared in Committee as an amendment.

The Lord Advocate: The right hon. Gentleman—whom I rather like—cannot have it both ways. He cannot say, as he did on Second Reading, "If the right hon. and learned Lord Advocate will do his best to improve the Bill, we will give him every support" and in the next breath say that because we have done that it is rather shocking. I am perhaps more flexible than was the right hon. Gentleman in handling the 1970 Bill. I believe—and I say this advisedly—that many of the essential changes contained in this Bill could have been done in 1970 without the risks that the right hon. Gentleman and others advised us would be run. There is nothing wrong with flexibility.
I acknowledge my indebtedness to the hon. Member for Dundee, West and the hon. and learned Member for Leith. Amendments were tabled dealing with the major change in the Bill—the optional redemption. I am not sure how much it will be used, but I hope it will be used widely. I agree entirely with what the hon. Member for Renfrew, West said. We shall make every possible effort to advertise and publicise the effects of this legislation and of his legislation in 1970 with regard to land conditions. One rarely comes across problems on land conditions. It is feuduties that worry most people. Where land conditions inhibit

development, as in the example given by the hon. Member for Caithness and Sutherland (Mr. Maclennan), it is desirable that the public should know of the existence of the Lands Tribunal and the provisions of the 1970 Act.

Mr. Maclennan: Will the Lord Advocate take this opportunity—which he has not taken at any earlier stage of the Bill—to explain to the people of Scotland why it is that they should take his assertion today that he intends to go on with the total abolition of the feu-duty system any more seriously than they took the assertions made by the Conservative Party before the 1970 election? He has today given some clue as to the possible time scale he has in mind—it is to be within five years. We have now had three and a half years of Conservative Government during which time this matter could have been dealt with. The right hon. and learned Gentleman emphasised the enormous difficulties of tackling this problem and, apart from saying that the system has lasted for a thousand years, he did not explain where the difficulty lay. Is it an intellectual difficulty on the part of the Lord Advocate in retaining this aspect of feudalism, or is it a problem of resources, advice, or interest? Unless the Lord Advocate gives an explanation the people of Scotland cannot be blamed for not taking seriously the Government's assertions.

The Lord Advocate: This raises a point which was also mentioned by the hon. Member for West Lothian (Mr. Dalyell). I indicated on Second Reading the kind of time scale which I thought would be possible. I said I thought that it was possible to deal with the final stage of the problem of land tenure within the course of the next one or two years I said that there were competing commitments. There is the problem of land registration and registration of title. The right hon. Member for Kilmarnock will remember raising this matter in his opening speech on the 1970 legislation. It is important that we should go ahead with registration of title. This involves an evenly balanced argument whether one alters the basis of title before dealing with the machinery of registration. There are arguments both ways, but one or other of these competing requirements should be dealt with within the next one or two years. I cannot go further than that.
As an outgoing Member of Parliament, I should not be too glib in the undertakings which I give. I repeat that enormous difficulties are involved. The hon. Member for Renfrew, West must have been fascinated by these intellectual problems, and I appreciate that the hon. Member for Caithness and Sutherland will not accept that there are problems. But the House must accept from me, as Lord Advocate, that serious legal problems are involved. I am not basing this statement only on my position as Lord Advocate, since we have been advised by the most eminent advisers—and the right hon. Member for Kilmarnock will know who I mean—including the leading authority on land tenure in Scotland. The Government have been given the most expert advice on these complicated matters.
I wish to record my appreciation of the general reception given to the Bill. Criticism was predictable on the lines, "Why have you not done more?" and also, "We would have done it so much quicker." But we have heard that all before. The main thing to bear in mind is that we have made a massive stride forward—not just a small step—to reform land tenure in Scotland. It is sufficiently material to make it impossible to stop at this stage, for various technical reasons, and this process will have to be completed by the next Conservative Government. I have every confidence in recommending the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

BIOLOGICAL WEAPONS BILL

Not amended (in the Standing Committee), considered.

Clause 6

EXTENT

6.28 p.m.

Mr. Brynmor John: I beg to move, in page 3, line 12, at beginning insert:
'(1) This Act shall bind the Crown'.
I shall at the outset briefly review the progress of the Bill and its terminology. To obtain any international treaty at all is a difficult problem, and in terms of chemical warfare and biological warfare the two matters have to be separated. It was thought at the earlier period when this matter came up for consideration—and this view has not been weakened by the Minister's letter written to me on 13th December—that the reason biological weapon procedures were able to be progressed related to the difficulty of delivery. But any international treaty is met with some degree of suspicion because in international affairs there is a generalised climate of suspicion.
Both in the treaty to which the United Kingdom assented and in this Bill there is a great vagueness, which is the price of any agreement that is difficult to enforce and which contains shadowy lines. By Article IV of the treaty the signatory States undertook to enact, according to their own constitutional processes, a treaty to give efficacy to these provisions within the territory of the State concerned.
During the debate that led to the treaty certain assurances were given on behalf of the British Government, and those assurances were repeated in Committee. The United Kingdom gave a solemn undertaking that we had never produced or possessed biological weapons and that we would never do so, but when we are enacting legislation in this House, we must look at the matter in terms of what people outside the House will think when they examine our domestic legislation.
We understand that many Governments will have a vested interest in trying to


suggest that the provisions of legislation are not being properly enacted or observed by the United Kingdom. It suits the convenience of many countries to pay lip service to disarmament but to take measures that effectively bar steps to disarmament. We see from the Bill that it bans any person from developing, producing, stockpiling, acquiring, or retaining biological weapons, but that it does not bind the Crown. This was made clear by the Under-Secretary of State for the Home Department in an answer in Committee. He said:
The Bill does not bind the Crown specifically, but the hon. Member will recall the undertaking on Second Reading that there is no intention of contravening the Bill in any way in any Government establishment."—[OFFICIAL REPORT, Standing Committee E, 11th December 1973, c. 34.]
If that is the case, there is no reason why the binding of the Crown should be left out of the Bill.
6.30 p.m.
If it is really the Government's intention under no circumstances to produce or to stockpile these weapons, it is easy for them to include a provision in the Bill saying, as we say in our amendment, that this Act shall bind the Crown. Although we have speculated about the private development of such weapons, the letter which I received this morning from the Minister makes it clear that the main producer of these weapons is the Crown—any Government. Therefore, to exclude the Crown from the list of bodies bound by this Act is fatally to weaken it. It will indicate to the person looking from outside that Britain is prepared to pay pious lip-service to the idea of international disarmament but that in the one crucial area where the Government could declare firmly their intentions by saying, "We, as a Government, will not do this", they stop short and say, "We must not bind the Crown. We shall give an undertaking, but we shall not bind ourselves by legislation."
That is not good enough. It is not good enough to reassure other nations at a time when we hope to progress to chemical warfare disarmament. It will not reassure those of our countrymen who are concerned about the Government's involvement in the manufacture of these agents of destruction and disease. It will not reassure the person in another

country who is looking for a half-excuse for failing to abide by the treaty himself. Therefore, I believe that the non-inclusion of the Crown as being bound by the treaty will make a great difference unless the Government accept the amendment.
The second reason that I adduce in support of the amendment is that I am not sure whether the Government have carried out the terms of Article IV of the convention in the way in which they have drafted the Bill. I quote from Article IV because it is important. It says:
Each State Party to this Convention shall, in accordance with its constitutional processes"—
that is, this Bill—
take any necessary measures to prohibit and prevent the development … of (biological) agents, toxins … within the territory of such State, under its jurisdiction or under its control anywhere.
Mention is made time and time again in the convention of "the State". If the State—in this case the British Government—is to say in its own constitutional processes that it will ban the production, and so on, of these weapons by private citizens but will not bind itself, as a State, to give up their production, development and stockpiling, I beg leave to doubt whether the Government are carrying out the terms of the convention. If they are doing so according to the letter of the convention, they are certainly not doing so in accordance with its spirit.
The Government can transform the doubt that we have and the attitude which others are likely to take of the Government's adherence to the treaty through this Bill by adopting the amendment. I hope that the Minister will consider it sympathetically.

The Under-Secretary of State for the Home Department (Mr. David Lane): I have considered this matter carefully and sympathetically since it was raised in Standing Committee last week and especially since the Opposition tabled this amendment.
I hope that the Opposition will accept that the Government are as concerned as they are that our acceptance of the convention and its implications leading up to this Bill is watertight in the sense that we intend fully to honour all our undertakings as a Government in subscribing to the convention.
I believe that the hon. Member for Pontypridd (Mr. John) exaggerated the doubts and suspicions which might arise elsewhere when he said that if these words were not written into the Bill it would fatally weaken the credibility of this country in this context and that some people might allege that the British Government were merely paying lip-service to it. However, I see the spirit in which the hon. Gentleman moved the amendment. I must advise the House against accepting it, but I hope that I can reassure the Opposition and any others in this House or outside who may have doubts.
On behalf of this country we as a Government have already undertaken in Article I of the convention
never in any circumstances to develop, produce, stockpile or otherwise acquire or retain
these various agents or toxins, first, and the various weapons, equipment, or means of delivery, second. That is written as plainly as it could be in Article I, and that is the convention to which we have subscribed as a Government on behalf of this country.
The undertaking is clear from the convention, and it is not necessary to write it in further in the Bill. But there is a further and second disadvantage. It is that the Bill basically is creating a new criminal offence of developing, stockpiling, and so on, these various weapons. I ask the House to consider, if the criminal offence is also theoretically to be committed by a Government, what will be the penalty for a Government trying to enforce the law against themselves. Apart from the reason that the words are unnecessary because of our adherence to the convention, if we accepted them we should land ourselves in a complete nonsense for the reasons that I have just given.
I said on Second Reading, and I repeat today, that we shall make sure that no Government establishment involved in this work infringes the Bill in any way. Again as I said on Second Reading, the Government do not produce or stockpile biological or toxic weapons and have no intention of doing so. In other words, nothing that is going on or that may go on in the future at Porton in any way constitutes, or will constitute, a breach of the convention.
As the hon. Member for Pontypool reminded us, in Article IV we were obliged to carry out our obligations under the convention through our constitutional processes; that is, to
take any necessary measures to prohibit and prevent the development, production, stockpiling, acquisition or retention of the agents, toxins, weapons, equipment and means of delivery specified in Article I …".
In our view, it is not necessary nor is it in accordance with our normal constitutional processes to bind the Crown in this instance.
There is the further point which was raised when the hon. Member for Pontypridd mentioned the problem at the end of the Committee stage, and it relates to Crown liability and civil law. Since the enactment of Section 2 of the Crown Proceedings Act 1947 the Crown is no longer exempt from liability for civil wrongs, and this liability is determined by the general rules of the law of tort. Nothing in the Bill makes the Crown any less liable for damages which might be caused by activities in a Government establishment. I hope that that further assurance will set at rest any doubts on that aspect of the Crown's involvement.
In view of that explanation and my repeated undertakings and assurances, I hope that the House will agree not to press the amendment. We believe that not only is it unnecessary but possibly it would cause confusion.

Mr. John: Generally I must confess that I am not convinced by the Minister's explanation. We regard the Bill as a step forward. The point which I have tried to make is that it is not as great a step forward as it might have been, because of the Government's reluctance to bind the Crown. The Minister does not deny that it is possible to bind the Crown and that to do so would be efficacious, subject to the amendment of the penalty clauses.
Although the Government are not bound, Service men are under certain penalties in the Army Act and in the Navy Discipline Act. Clause 5 makes it clear that a Service man might well be punished for what his Government can legitimately order him to do. That seems fundamental and complete nonsense. The Minister is right to say that an assurance is given. He has given an assurance in


terms as clear as he is able to use. Although he gave an undertaking about weapons, he has not given an undertaking regarding the research which is necessary to continue to produce biological agents and the weapons which transmit such agents. They can be conventional weapons. There is no need with present technology to have to develop special weapons for the transmission of biological agents in so far as they can be reliably transmitted.
I regret that there is not more commitment by Britain to the treaty. However, in view of what the Minister has said and because I recognise that the Bill represents a step forward, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That the Bill be now read the Third time.

6.42 p.m.

Mr. E. S. Bishop: The Opposition welcome the Bill. We have done our best in Committee and at other stages to assist the Government to produce a Bill which we think will be less vague and at the same time consistent with the convention which the Government seek to ratify. It must be appreciated that the Bill is a step on the road to disarmament, and that a milestone came from the Geneva Protocol of 1925. Now, nearly 50 years later, we have progressed towards this measure. We welcome it, but we feel that the Bill is rather vague.
The Opposition moved various amendments in Committee and we were promised replies. Due to the business of the House being changed today, we may now hope for some replies on Third Reading. I recognise that the Minister has sent the promised letters. However, we have not yet had time to study them. It would be helpful if he could clarify the position by putting his replies on the record.
This is an important Bill. It seeks to ratify the convention, which seeks to prohibit the production, stockpiling, acquisition and retention of weapons which are detailed in the measure. The value of the measure enacted by the Powers and signatories to the convention—and I understand that there were 110—is that each should have confidence that the measures which it has agreed and the steps

being taken by each Power give an international assurance that biological weapons have been banned and their manufacture and use prohibited.
The impression given by the Bill is one of vagueness. It appears to be a statement of intent. However, let me emphasise that we welcome a statement of intent, such as it is. As my hon. Friend the Member for Pontypridd (Mr. John) said, the Bill is drawn up in rather vague terms. We have sought to strengthen it by amendments wherever possible.
There is confusion about the terms relating to biological agents. We are told that they mean
microbial or other biological agents, or toxins
That is rather vague. We hoped that the Minister would accept a restriction. That would be in line with the World Health Organisation's report on biological and chemical weapons, published in 1969. That theme was taken up by several hon. Members, including my hon. Friends the Members for Pontypridd and West Lothian (Mr. Dalyell). The Opposition feel that there are some dangers in the vagueness with which the definition is couched.
There is the problem of quantities and specifications which are to be included. Bacteriological substances, the genetic code and the problems of the pharmaceutical industry must also be considered. We feel that there is need for clarification. I recognise that the Minister said in Committee that he felt a little uneasy about that matter. He said:
If, through any blinding flash of light, we can see a better form of words that would be more satisfactory and widely understood, we could consider putting it in at a later stage."—[OFFICIAL REPORT, Standing Committee E, 11th December 1973, c.7.]
It seems that there has not been any blinding flash of light. In fact, there has been little light outside to illuminate our views or the Minister's possible help. We should welcome the Minister's telling us whether he has again considered the matter. Further, it would be helpful if he were to suggest any ways in which our fears may be overcome.
Some hon. Members have been concerned about single- and dual-purpose materials. The House and the country are entitled to further clarification. We are not concerned only with stopping the


wrong use of biological weapons, namely, weapons which in that context would be designed for hostile purposes; we are anxious to protect those who are concerned in research and development and those who wish to continue to produce substances that are necessary for peaceful civilian purposes. Without a more specific definition a danger is posed. it may be easier to define the single-purpose substances which are for hostile or peaceful uses. There is doubt about dual-purpose materials such as tear gas, phosgene, and a wide range of bacteriological substances and chemicals. We want to prohibit one and not the other. We want to prohibit production for hostile purposes. We do not wish not to restrict or hinder production for peaceful purposes.

The question arises, who is to judge what is right and what is wrong? It was suggested that the Minister might bring in the impartial and expert resources of the Scientific Research Council. The Minister did not agree. He felt that other research councils may be appropriate for the occasion. Many hon. Members feel that there is a need for an impartial and expert advisory body outside the Government. That is important not only to Britain but to other signatories to the convention. There is no point in being party to a convention or treaty if it is not possible to be satisfied that the other signatories and others who say that they support the convention or treaty are not equally bound by it. We must have confidence in its purpose and effectiveness.

Parliament has the right to know what is going on. We feel that there should be an annual report to Parliament on the working of the measure and the problems and possibilities that are involved. We should be able to debate the measure fully. It is an important aspect of our defence.

I shall not on this occasion make more than a passing reference to Porton. The fact that it is open to hon. Members to visit the establishment and inquire into what is being done there provides some satisfaction, but that does not go far enough.

On the matter of seeking expert and impartial advice, it is not that we distrust civil servants and those who advise Government Departments; it is merely that there is a need for impartiality. We must

be satisfied that the Government are not judge and jury in their own case.

Reference is made to the possibility of taking action against any who offend against the code laid down in the Bill. We are told that it will be for the courts to decide whether an offence has been committed. That is all very well, but if Parliament does not know what the measure means one wonders how the courts will be able to decide what Parliament had in mind and whether anyone has offended against the measure.

In the letter which the Minister has kindly sent to us since the completion of the Committee stage he has said that if the measure is not clear the situation will be helped by sending out an administrative circular. But we know that circulars and notes of that sort are not part of the measure, and therefore the courts will have to go by what the measure says.

More important than the courts being informed is the need and, indeed, the right of the public and all those involved in research to know at the earliest stage what is right and wrong. Apart from the fact that those who offend against the measure may be punished, as provided for by the Bill, there is the important factor that we want to prevent research and development into and production of certain gases and biological weapons. All those involved in the production of chemicals, drugs, and so on, have a right to know whether they are offending against the measure.

We are also concerned about the absence of any verification procedure. It seems to be left to the various Governments to decide whether people under their control in their own States are, as the convention puts it, keeping within the confines of the convention. We need some assurance that the verification procedures which have been agreed internationally—that is, if they have been agreed—are adequate to ensure that signatories to the treaty are keeping to the internationally agreed code of conduct.

The Bill is a little more forthcoming about the action to be taken when it is alleged that an offence has been committed, but this is rather late in the day, and I believe that the House is entitled to know more about the matters to which I have referred today and to which my hon. Friends referred in Committee.

The Minister claims that the Bill is tied to the convention—and that is so. The hon. Gentleman may claim that it matches the terms of the convention, but in that case the convention is perhaps a little weak in having to satisfy the lowest common denominator of the international points of view that have been put forward.

The Bill is important. Some may say that in the light of the earlier statement today and the previous measure which the House considered, this Bill is of little importance, but in my view it is of supreme importance, because without international assurances and guarantees of enforcement, nationally, the whole of our population can be endangered. We recognise that in these days of guerrilla warfare, terrorism and hijacking, those concerned in those activities do not sign treaties and are not subject to conventions. There are real dangers. Some substances, in the proper hands, can be used for peaceful purposes, but if used by others they can endanger entire populations in ways which I need not detail. The situation has changed radically in the last few years, and we hope that the Minister will be a little more forthcoming than he has been to date.

We should like an assurance that the Government are pressing ahead with other countries to make sure that it is clearly understood that although the Bill is a welcome step on the road towards disarmament there is still a great deal of work to be done. We hope that the Government will take the initiative, with other countries, to ensure that when they ratify the convention they pass their own legislation to follow up their ratification of the treaty. We look to the Government to take the initiative, so that we may move further along the road towards disarmament. In the meantime, we welcome the Bill as a step forward, vague though it may be, and basically a statement of intent though it may be. We hope that it will be an incentive to more international endeavour to secure disarmament.

6.57 p.m.

Mr. Tam Dalyell: Perhaps I may remind the Minister that he owes some of us a letter on a rather complex issue raised in Committee, namely, the manipulation, or potential manipulation of the genetic code, and I hope that

he will tell us that he is looking into the matter.
My hon. Friend the Member for Newark (Mr. Bishop) said that this is an important matter, and so it is, but I hope that we shall not bathe in the comfortable assumption that we have done a complete job, because the truth is the opposite of that. This is about a very small and—dare I say it?—easier part of a real problem. I do not think that we as a Parliament are in a position to congratulate ourselves. We can congratulate ourselves and start feeling easier in our minds only when we have done something about the more urgent and relevant problem of chemical warfare.
International progress on that matter has been deplorably slow. Therefore, any congratulations that may be forthcoming from me will have to wait until the Governments of the world have done something about banning chemical warfare, instead of contenting themselves with dealing with the easier half of the problem.

6.58 p.m.

Mr. Lane: My reply to the hon. Member for West Lothian (Mr. Dalyell) is that the Government are not claiming more than a moderate step forward, and I hope that that is clear to the House.
I thank hon. Members on both sides of the House for making it possible for us to get the Bill through quickly. I am sorry that I have had to advise both the Committee and the House against accepting any of the constructive amendments moved by the Opposition. I know that my replies have not wholly satisfied hon. Gentlemen opposite, but I hope that it will be possible to make equally rapid progress with the Bill in the other place so that we can go ahead and ratify the convention as quickly as possible.
The hon. Member for Newark (Mr. Bishop) raised two main points. I have tried to cover these in my letter to the hon. Member for Pontypridd (Mr. John) and perhaps I may summarise what I said.
First, there is the argument about definition. We have considered this carefully. We have not had a blinding flash of inspiration, otherwise we should have put down an amendment, but, thinking the matter over and considering the alternatives, we felt that the right course was


to stick to the broad definition which was originally written into the Bill and which is still there, but to embody in the administrative circular which we shall issue to the courts, to the police, and so on, when the measure is on the statute book some more explanatory words which will be on the same sort of lines as the possible alternatives which we have considered, as a definition.
It will be something in this form, that "biological agent" means "any microbial or other biological agent which depends for its effect on multiplication and which would cause disease or death in man, animals or plants". Our considered view is to leave the definition broad in the Bill but to give illustrative guidance in the circular which we shall be issuing.
We considered enforcement and verification in Committee. I do not think that either side of the House is urging that there should be a great paraphernalia of new control spreading over the whole pharmaceutical industry. But we believe that there are quite sufficient supervisions, controls and knowledge over this area of production and research to satisfy all legitimate anxieties about it. I mentioned in Committee the Medicines Act 1968, which provides for ample review of all these activities. We do not believe that we could add anything to the Bill in this context which would increase the prospects of detecting breaches under the Bill. When the Bill becomes law, we shall try to make available all the resources, inside and outside the Government, if there is the slightest suspicion of anything unlawful occurring.
The last point raised by the hon. Member for Newark was, as he put it, that the Government should not be judge and jury in the same case and that there should be a greater independent element in this matter. I can only remind him that it is possible, in the progress of the convention, for our work under it to be raised in the House at any time by any hon. Member who wishes to do that. Written into Article XII of the convention is a commitment to review the work of the convention after five years. That gives us a long-stop opportunity of independent review in any case.
I am sorry that the hon. Member for West Lothian has not received the letter

which I sent to him last Thursday. Evidently that has gone astray in the post. I tried to deal clearly in that letter with the hon. Gentleman's point about the manipulation of the genetic code. What I said to the hon. Gentleman was, in brief, that we have no alternative here but to go on trying to preserve the distinction between chemical substances and biological agents, but, as the boundaries of scientific knowledge are extended, we shall obviously have to look at this matter again on an international basis. All we can offer at present is the prospect of making progress in similar agreements in relation to chemical substances whose development cannot be justified for peaceful and related purposes. When that progress has been achieved the position of animo-acids will presumably be put beyond all doubt. That is our hopeful forecast of what it may be possible to achieve.
We are seeing this as only a first step. That is what the convention said in its preamble. It is a first possible step towards the achievement of agreement on effective measures for prohibiting the development, and so on, of chemical weapons. Again I confirm that we shall be giving clear advice to the police and to all others who may be concerned about the administration and enforcement of the Bill. It is clear that we cannot get perfection in the Bill. We recognise that it is not a perfect solution, but it is still a very valuable step to take. We shall continue to take initiatives on general disarmament and to make further progress as quickly as possible.

Mr. Dalyell: Is there real activity by the Government on the question of amino-acids at present?

Mr. Lane: I hope that we are being active. As the hon. Gentleman has raised the matter, I shall look further into it. We shall do our best to keep up the momentum on this whole work.
On that basis and in that spirit, I hope that the House will give the Bill a Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

IMPORT DUTIES

7.4 p.m.

Mr. Peter Shore: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Import Duties (General) (No. 8) Order 1973 (S.I., 1973, No. 1845), dated 5th November 1973, a copy of which was laid before this House on 22nd November, be annulled.
This afternoon we have had a Budget that failed signally to match the gravity of the hour. Now, just three hours later, we are presented with what is in effect a mini-budget; a budget, moreover, that has more impact on our two major economic problems, the balance of payments and the cost of living, than the Budget which the Chancellor took 45 minutes to present earlier today. However, unlike the earlier Budget, which was largely irrelevant to the problems that we face, this one, as I hope shortly to demonstrate, is actually perverse in its effects. It will impose taxes on our food and it will worsen further the balance of trade.
Certainly we need an import order today, but an order entirely different from that which we are discussing. What we need now is an import control or import quota order to arrest the flood tide of imports which now threatens our ability to earn our living and defend our currency.
The size of our trade deficit, which is the background to the order, is indeed calamitous. So far this year we have chalked up a trade deficit of nearly £2,000 million. With every passing quarter the gap has widened. It was minus £360 million in the first quarter, minus £410 million in the second and minus £550 million in the third, and it has reached an almost unbelievable minus £625 million in the last two months.
If there had been no Middle East war and no overtime ban in the pits—and neither of those events is reflected in these appalling trade figures—we should be faced with the need for urgent and severe action to begin what is bound to be a long and arduous effort to earn once again our keep and to pay our way in the world. But we have not got an import quota or import control order. Instead, we have an order, a vast volume, which unbelievably seeks further to relax trade barriers between Britain and the

European Economic Community and, with the conspicuous exceptions of Commonwealth trade and trade in food, to lower tariffs generally, although moderately in relation to the rest of the world.
The folly of a further cut now in our tariffs with the EEC in particular will be evident to all those who have followed the course of our trade with the Continent since the Treaty of Accession was signed just under two years ago. Our trade deficit with the Six in 1971 stood at £180 million. In 1972, partly anticipating entry and the effort by both Continental and British exporters, the deficit grew to £499 million. That is trade with the Six alone. In the first 11 months of this year, following the first 20 per cent. tariff cut in April 1973, our trade deficit has reached £1,036 million. Comparing 1973 with 1971, our trade with the EEC Six will have deteriorated by the end of this year by a full £1,000 million.
What does the Minister for Trade and Consumer Affairs expect in 1974? It is no good for him to emulate the Chancellor of the Duchy and tell us about the growth of Britain's exports to the EEC and at the same time fail to tell us about what is happening to our imports from the EEC as a whole. Indeed, the Minister fell into that error in a speech which accompanied the release of the order. In that speech he pointed rather proudly to the fact that Britain's exports to the Six in the first 10 months of this year totalled £3,235 million, an increase of 35 per cent. over the same period last year. That was the theme to which his right hon. Friend spoke in the debate we had not long ago about the astonishing successes that have followed Britain's membership of the EEC. Against that 35 per cent. increase in Britain's exports, I must now inform the House that the increase in imports is not 35 per cent. but 50 per cent. during the same period. That is why the gap, great and grievous as it was in 1972, has grown and continues to grow so calamitously in 1973.
From the succession of heavier quarterly deficits that we are revealing, all the signs are that, unless something new and additional, far beyond the measures announced by the Chancellor today, is introduced, 1974 will be even worse than 1973. It is no good Ministers comforting themselves with the thought that we have


a competitive power. Yes, indeed, we have—and that has brought some grave problems of a different kind as well.
But the policy of floating the pound started in the summer of 1972. We have now had 18 months' experience of floating the pound. I am afraid that it has not produced, nor begun to produce, any sign of improvement in our overall trading position—that is, in the balance between our exports and imports. That being so—and it is undoubtedly so—what the House will want to know from the right hon. and learned Gentleman is why Ministers have come forward at this particular time with an order which seeks to relax further the trade barriers between Britain and the rest of the world.
I know partly the answer to the question. This measure has been introduced not because it relates to any need or development within the British economy but because it is part of a pre-set timetable, a timetable worked out in the Treaty of Accession nearly two years ago, a timetable which Ministers feel they must slavishly follow even though circumstances have changed so radically in the intervening period.
But even if one allows for the constraints of the Treaty of Accession and for the diffidence of Ministers in seeking to alter it at so early a stage, I am surprised that no reference has been made in any ministerial announcement about the possibilities that exist for changing the timetable. Let me refer the right hon. and learned Gentleman in particular to Article 26 of the Rome Treaty, the underlying document to which all our commitments relate. If the right hon. and learned Gentleman looks at it he will find that
The Commission may authorise any Member State encountering special difficulties to postpone the lowering or raising of duties …
on commodities in relation to third countries and to the common external tariff. "Postponement" is written into Article 26. That would help to postpone or avoid the great bulk of changes written into the Import Duties (General) (No. 8) Order 1973. It would not deal with the effects of lowering tariffs between Britain herself and the EEC.
There are other procedures under the Treaty of Rome which the Minister could seek to employ. Article 108 says:
Where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments …".
Does the right hon. and learned Gentleman accept that he is in difficulties, or is likely to be in difficulties, in the balance of payments? If he does and that is so, the Commission is supposed to investigate the position and make recommendations. There is the possibility of the provision of mutual assistance, again within Article 108, which says:
During the transitional period, mutual assistance may also take the form of special reductions in customs duties …
to the other members of the Community. In other words, they could lower their customs duties in relation to Britain on a more favourable timetable as against the scheduled reductions that this country has to make against the EEC.
Lastly, Article 109 of the Rome Treaty says:
Where a sudden crisis in the balance of payments occurs …"—
perhaps the right hon. and learned Gentleman might accept that if it is not "sudden" it is at least a crisis—
… the Member States concerned may, as a precaution, take the necessary protective measures.
Even the Treaty of Rome envisages that there are certain circumstances and situations in which import quotas—that is precisely what these special measures refer to—can be introduced. What I want to know is whether the Government have considered these procedures and whether, in the otherwise somewhat fruitless dialogue that went on in Copenhagen earlier last week, or in the continuing series of meetings in Brussels, all these matters have been touched on, or whether any of them have been raised? I say it with some emphasis because I am aware, and I do not think any right hon. and hon. Members on either side of the House can fail to be aware, that the order of magnitude of the figures we have been discussing, grave as they are, is likely to be enormously increased in the year ahead.
Even if there was no serious interruption in oil supplies, the price of oil is now going to rise to a really formidable


degree. Even in the last month the price of oil has doubled, to take the October and November price increases unilaterally announced by the oil sheikhs and other Middle East producers, which means that Britain's oil import bill of £1,000 million in 1972 is bound to become, without any increase in quantity, about £2,000 million in 1974. I say doubled, but the right hon. and learned Gentleman knows full well that the availability of oil, or rather its price, is likely to be very much higher than the increased levels which were posted by the Middle East and OPEC countries only a few weeks ago.
The free market price for oil, if the figures quoted in Iran are anything to go by, could be three or four times as much as it was in the first half or the first three-quarters of this year. When we talk about the overriding need for doing something about our balance of payments situation, we are not overstating the seriousness of that situation. But to have, on the same day, a so-called Budget which has no new proposals whatever directly related to this most serious problem for the British economy, and to find ourselves discussing three hours later an order which seeks to liberalise trade further between Britain and one of its major deficit trading areas, is an astonishing combination and, indeed, a disastrous one.
My quarrel with the order is not simply based upon the balance of payments and what I fear to be its effects. It is also based upon what I see as its second major defect—that it will give a further twist to the cost-of-living spiral and in the most sensitive area—the price of food. The November food index stands at 207, compared with 174·3 in November 1972. So in one year the price of food has risen by 19 per cent., and this during a period which includes five months of total freeze, six months of severe restraint in phase 2 and the first month of phase 3. I can think of no comparable increase—I doubt whether any other hon. Member can either—in peace or war in my lifetime.
What does the order do to the price of food? It imposes new taxes on food beginning on 1st January 1974 where previously either no taxes or lower taxes have operated. It imposes them in the

form of customs duties and tariffs levied on imported food. I will not weary the House by itemising all the foodstuffs whose prices will be increased. That would take a very long speech. But I will mention three main categories of foodstuffs that will be particularly hard-hit.
The first is the whole range of fresh fruit and vegetables which form so important a part of the national diet. It is true that on 1st January our tariffs on EEC horticultural products will be lowered by 20 per cent., and against that we have to harmonise upwards our tariffs on horticultural imports from third countries by 20 per cent. on the same date. But only about 27 per cent. of our fruit and vegetables come from the EEC, on which the tariff is to go down, whereas 73 per cent. come from those third countries whose exports will now have to pay higher tax. So there is no joy for us there.
The second category where tax will bite is on tinned foods of all kinds but particularly fruit, fish and meat. We eat more canned fruit and, I believe, canned fish than any other country in Europe. All of us who remember the well-stocked shelves of the local grocers' shops, with their tins of pineapples, grapefruit, apricots and peaches, with labels from Israel, Spain, South Africa, Canada, Australia, and all around the world, will realise that this national habit of eating tinned fruit is firmly established. Much of it, as I said, comes from Commonwealth countries, and upon their imports a tax equal to 40 per cent. of the common external tariff is to be imposed on 1st January.
I should like to give one or two illustrations, not even from a Commonwealth country. I have here some of the tariff changes which will affect our imports from Israel, a country which supplies us with a great deal of canned fruit of all kinds. Grapefruit from Israel, which is not unknown on the British breakfast table, at present has a nil tariff, but on 1st January it will be 6 per cent. On orange juice there is a nil tariff and on 1st January it will become 7½ per cent. Tinned grapefruit has a nil tariff and on 1st January it will be 4¾ per cent. On tomato juice there is at present a 5 per cent. tariff, which will rise on 1st January to 11 per cent. The tariffs on melons and oranges will rise from 5 per cent.


to 7½ per cent. on 1st January. This is from Israel, a country which has not enjoyed the Commonwealth preference, the nil tariff régime, which most of our Commonwealth food-supplying, and particularly fruit-supplying, countries have so long enjoyed.

Mr. Eric S. Heffer: I am sure that my right hon. Friend will be interested to know that most northern working-class families at Sunday evening tea have tinned salmon with salad followed by tinned peaches and tinned cream. That is a traditional working-class Sunday evening tea, and it is precisely what this Government's policy will hit.

Mr. Shore: I am glad that my hon. Friend has made that point. These, of all the taxes—and there has been a whole series of them—will reach into every family in the land. Families will really feel this, and they will rightly feel resentment that these taxes should now be imposed upon them.
I have mentioned fresh fruit and vegetables and canned fruits, fish and meat, but the third category is the tax on meat. There is a tax on beef of 4–5 per cent., but that may not be noticed so much because the levies have already affected the price of beef and the free market allows our meat to go surging into the Community, where prices are so much higher. That has already been felt.
But where it will be felt most dramatically is on mutton and lamb, In 1972 we imported £105 million-worth, according to the overseas trade statistics, of which no less than £102 million-worth came from New Zealand and Australia. Apart from a small specific duty, our lamb imports have been tax-free until now. From 1st January they face a tariff of no less than 8 per cent. There will be an 8 per cent. tax on the leg of lamb and on the shoulder of lamb that we have enjoyed as very much a part of our national diet.
It should be remembered that all this is only the first step in a series of price increases which will go on year in and year out, unless there is a new Government with the will to alter the procession of events, until the end of 1977.
The direct effect will be an ever-increasing burden of tax on the nation's imported

food but the indirect effects will be serious, too. Taxes on imported food and the threat of the extension of the CAP are forcing our traditional suppliers to diversify away from the British market. This point was made in the short debate on the motion moved by my hon. Friend the Member for Swindon (Mr. David Stoddart) last week. Those who made this point were absolutely right.
Only two months ago, in October 1973, the New Zealand Meat Board Market Development Committee, an official body, recommended that 23 per cent. of lamb exports should be diverted from the United Kingdom market. It aims to sell instead to Greece, to North America, to Japan, to Germany and other European countries. Australia, too, following Mr. Gough Whitlam's visits to Tokyo and Peking, is planning to conclude trade pacts with those great and populous Asian countries. All this is bound to increase the price of food in Britain.
What makes the whole thing so scandalous is that these increases in our food prices come on top of other specific measures to drive up the cost of our food.

Mr. E. Fernyhough: I agree with my right hon. Friend that what makes these measures so indigestible is that they come on top of other food price rises. But what makes them repulsive is the fact that when the money has been collected we have to send it across the sea to the EEC.

Mr. Shore: My right hon. Friend has put his finger on one of the most sensitive points in this whole arrangement. One of the most offensive parts of the Treaty of Accession is the part which enables the authorities in Europe to take the revenue from these taxes as though it were their own, under the shameful provisions which the right hon. and learned Gentleman the Minister for Trade and Consumer Affairs did so much to cram down our throats a year or so ago. But it would take me far beyond the scope of the order if I pursued that aspect now.
To come back to the question of food prices and the effect of this order, I was saying that what was so scandalous was the fact that it came on top of all the other measures to put up the cost of our food. It will be noted that, with the exception of beef, none of these categories


of foodstuffs which are to be taxed on 1st January is included in the common agricultural policy. Those covered by the CAP are separately taxed by the system of variable levies on imports, coupled with intervention prices and intervention boards inside the EEC. These new taxes have from 1st January, also come on top of the appalling effects of the Government's economic mismanagement which has devalued the pound in the last two years to an unprecedented extent.
The effect of this on our food bill needs to be stated. I said that lamb from New Zealand and Australia will be taxed at 8 per cent. from 1st January. But in the two years since the Smithsonian agreement, when the pound was fixed against the new parity régime which was established at that time, it has devalued against the New Zealand currency by 24·7 per cent. and against that of Australia by 23·8 per cent. The effect of that change in the value of the pound has been inevitably, immediately and automatically to raise the price of our imported food from Australia and New Zealand to the extent that our currency has been devalued.
In the way the pound has floated against the currencies of our principle food suppliers in the last two years, we can see one of the main causes of the increased food prices in Britain. We devalued by 11 per cent. against the United States, by roughly the same against Canada, by the same against the Argentine—which still provides us with a good deal of our beef—by the same against Israel, by 21 per cent. against Spain, by 24 per cent. against South Africa and by something over 20 per cent. against the countries of the EEC, with the sole exception of Italy. The right hon. and learned Gentleman and his right hon. Friends talk about world prices as the main cause of Britain's rising food prices. I have never sought to conceal, either from my friends or from myself, the fact that world prices have been a great problem in this last year—of course they have But if I am prepared to face the reality of world prices, let the Government also face the reality of what the devaluation of the pound has done, together with the common agricultural policy levies and all the specific and measurable food taxes that are being imposed upon food brought into Britain.
What makes the whole situation ludicrous is the fact that the Government are still supposed to consider inflation as their priority problem. The Minister of Agriculture himself, in the Agriculture Council meeting in Brussels on 11th December, barely a week ago, when discussing the reform of the CAP—he has not put forward any proposals for the reform of the CAP, as such—called upon the EEC to reduce the common external tariff on selected farm and food products as part of the fight against inflation. In other words, the Minister of Agriculture has proposed to the Agriculture Ministers in the EEC that they should do the very opposite of what the right hon. and learned Gentleman is trying to get this House to do tonight. He is demanding that we impose the CET on a wide range of foodstuffs which have never previously been taxed, while his right hon. Friend is suggesting to his colleagues in the EEC that they should do precisely the opposite. It really is bedlam.
I have a third and main objection to this order—not just to the effects on the balance of payments, not just to the effects that it will undoubtedly have on prices, but to the new pattern of preference which this order establishes in our trading relationship with the rest of the world. First, and most notable, this order marks the end of the Commonwealth preference system. I was tempted at one point to say that I feared it would mark the beginning of the end of the Commonwealth itself, certainly as we have known it in the post-war years, but I do not say it and I must make plain to the House my reason for not saying it, because it may give some encouragement to many of our people, many friends of the Commonwealth, on both sides of the House.
I put down a Question to the Minister in which I asked him whether, now that Britain was imposing the CET against Commonwealth countries to whom we had previously afforded preference, they, in turn, on 1st January, would impose taxes to an equal extent on those British exports to them which had previously enjoyed preference. I was delighted to learn from the Minister that only one country—New Zealand—was even considering doing so at the present time. I find this a remarkable and admirable restraint on the part of Commonwealth


countries. It shows that there exists in many parts of the world the hope and belief that this absurd policy of turning against Commonwealth trade will yet be reversed before damage is done.
It will be clear to anyone who has glanced at this order that so long as it continues the Commonwealth will be divided into two. The Commonwealth of Nations now becomes C1 and C2 in column 5 of this order. First, there is C2, the so-called associable countries—those of Africa and the Caribbean—which have the opportunity under the Treaty of Accession to negotiate some form of association with the EEC. For the time being, at least, their trade remains unaffected by this order. But on the far larger part of the Commonwealth, including the 700-odd million people of the Asian Commonwealth and the 40-odd million inhabitants of the old Commonwealth countries of Australia. New Zealand and Canada, about whom no agreement has been made, we now have to impose duties equal to 40 per cent. of the difference between what they now pay and the full burden of the common external tariff of the EEC. So let there be no doubt that this is a very damaging measure. It not merely discriminates against the Commonwealth; it divides the Commonwealth into two for the purpose of trade in the future. I fear that if we cannot reverse it soon great damage will inevitably be done, in spite of the forbearance of our friends.
Secondly, this order makes it clear that as old preferences are withdrawn new ones are to be granted for countries with whom we have no particular connection—for example, the countries of French Africa and of the Mediterranean—who are parties to favourable trade agreements with the Six. Thirdly, and very important, the British generalised system of preference is to be merged with that of the EEC. That is the third change in the new pattern of trade which this order seeks to impose.
This is a very complicated order to interpret, and I hope that the right hon. and learned Gentleman will give us a little assistance when he speaks. Am I right in my belief that the generalised preference system does not appear in the order at all; further, that it will not be made the subject of a separate order to come before the House, but that—I think

I quote from the Ministry hand-out—it will be largely implemented by directly applicable Community instruments not under United Kingdom legislation? Is that so? Are we being told that our trading relationships with the third world are to be determined without the knowledge of the House—we have not yet had even a statement—without debate on it, and with the need for only a ministerial decree at Brussels? Is that so? I hope that the Minister will answer.
We should also like the Minister to give us answers about two of the Asian Commonwealth countries whose trade is much affected by the loss of preferences in the United Kingdom market and also possibly by the GPS scheme. First, will the right hon. and learned Gentleman tell us whether the tobacco we import from India—which accounts for 25 million dollars a year, or 10 per cent. of total Indian exports to the United Kingdom—will be allowed to continue at the present low preferential rate of 2·9 per cent., or is it to be raised to the 6 per cent. or indeed, as I have sometimes read, the 10 per cent. of the EEC on 1st January?
Second, will the right hon. and learned Gentleman tell us whether jute-manufactured goods from Bangladesh and India will continue to be duty-free in the United Kingdom or whether, on 1st January, we shall have to impose a tariff upon them? These who are at all involved in the affairs of the Asian Commonwealth will know that jute and jute goods are of enormous importance to the countries that I have mentioned. Indeed, jute and jute products account for an unbelievable 80 per cent. of Bangladesh's total export earnings. Bangladesh is one of the poorest countries in the world. How can we withdraw duty-free access from such a country at such a time—and to whose benefit?
I invite the House to reject the order. The crisis that we face today will not be eased by anything within it. On the contrary, it will make our problems still more difficult as the balance of trade moves further against us and as inflation is stoked up still more by the need to tax hitherto untaxed food.
When we consider the number and scale of the misfortunes that we have experienced since we entered the EEC less than 12 months ago, the sheer necessity for the fundamental renegotiation of


the terms that were negotiated becomes plain even to the most obdurate Marketeer. We cannot allow our people to be taxed year after year by the levies of the CAP and by the duties of the common external tariff. We must reopen the British market to our traditional and low-cost food suppliers in New Zealand, Australia, Canada and elsewhere. We must not allow VAT, and we shall not allow VAT, to be imposed upon our food, and we shall decide for ourselves whether we have a VAT at all.
Above all, we have to take back the powers of regulation over the British economy, so that we can do what now so clearly needs to be done in the national interest—control the great surge of imports into the United Kingdom and control the outgoing tide of investment and money from Britain into Europe, and we must have the power to pursue lax, price and subsidy policies to help to counter the great evil of inflation from which we suffer.
None of these things can be achieved unless we break the bonds of the Treaty of Accession. Nothing can be done unless we renegotiate fundamentally its terms. By voting against the order we are not only fighting against unnecessary taxes on food and against an unnecessary hurt to the Commonwealth. We are also taking the first step towards economic sanity.

7.45 p.m.

The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): The right hon. Member for Stepney (Mr. Shore), in the breadth of his denunciation of the order, did no more than echo his familiar opposition to the entire case for accession by Britain, on any terms whatever, to the European Communities. The nature of the demand with which he closed his speech—for the breaking of the bond established by the Treaty of Accession, for total freedom in relation to tariffs, subsidies, and each and every aspect of our policy; the denunciation into which he launched, not merely of the common agricultural policy, with which I know that he is not over-friendly, but also of the entire concept of the common customs tariff and the common external tariff—was so far-ranging that it cannot possibly commend itself to any hon. Members who have with any con-

sistency at all supported the case for accession by this country to the European Communities. [Interruption.] I know that some of my hon. Friends may take a different view.
I want the House to have this matter in perspective. The nature of the right hon. Gentleman's opposition goes far beyond an analysis—even if it were an accurate one—of the consequences of the order, and takes us right into total opposition to membership of the Community. That is not a case which I think the House should accept. The right hon. Gentleman seeks to reopen the long argument about the pattern of our trade and the changing balance between our trade with Europe and our trade with the Commonwealth—a change that he knows perfectly well has been taking place for many reasons in different ways for a number of years, a change in the pattern that was taken into account in the consideration of the case for joining Europe in the first place.
Then the right hon. Gentleman sought to launch his two-pronged attack on the central provisions of the order by reference to its effect on food prices—I shall deal with that in a few moments—and also to the place which it should take alongside today's economic measures. It is important that the House should have that in perspective as well.
I do not question the gravity of the overall situation which my right hon. Friend the Chancellor of the Exchequor described in his statement to the House today. Nobody questions, as the right hon. Gentleman put it, the overriding need for measures to accommodate that situation. Nobody questions the need to do so by facing reality. We recognise that one of the measures advanced to meet that case could be a demand for import regulation—import controls—of the kind that the right hon. Gentleman described and of the kind I recollect the right hon. Member for Battersea, North (Mr. Jay) producing in 1964. But other measures can also be judged appropriate to deal with that central economic situation—measures which my right hon. Friend the Chancellor described today.
That is not the subject of this debate. All I am contending is that there are many ways in which to respond to the economic situation. The Chancellor has outlined effective and appropriate ones,


and it is certainly consistent with his proposals to conclude that it would not be right, quite apart from membership of the Community, to embark upon a far-ranging pattern of import control.
I was grateful to the right hon. Gentleman for drawing attention to Articles 26, 108 and 109 of the Treaty of Rome, because it demonstrated that even in his eye the treaty is not as rigid a strait-jacket as he would once have had us believe.
These measures can perfectly well take their place alongside the measures proposed by the Chancellor of the Exchequer today to improve the economic situation. The right hon. Gentleman asks, for example, what the measures contain which seek to deal with the pattern of the balance of trade, import and export. He will surely not overlook two simple measures which the Chancellor outlined, namely, the imposition of controls on credit and hire-purchase terms, which are likely to have a direct effect, as the Chancellor said, on the inward movement of consumer goods, and the export of consumer goods manufactured in this country—a relevant measure, acceptable as an alternative to those for which he argues.
The right hon. Gentleman has surely not overlooked the impact of the change in the balance of demand in the economy as a result of the other measures announced by the Chancellor. These are both measures which relate to the necessity—if necessity it is—for making more goods available for export and reducing the likelihood of such goods being consumed on the home market. They can take place happily alongside the broader provisions of the order.

Mr. Fernyhough: Is the right hon. and learned Gentleman saying that the British people are now living so well that it is very desirable, when we are fighting inflation in every sphere, to put up the cost of food, at a time when workers are being told that their incomes will be down because of short-time working, and when everybody has in every way to tighten their belts? Is he saying that at a time when incomes are to fall it is sustainable policy to take action to put up food prices?

Sir G. Howe: I am not saying anything of the kind. I shall in a moment explain

what I am saying about prices. I shall demonstrate to the House that on prices the net effect of the order will probably be downwards rather than upwards. I shall come to that in a moment, but I should first like the House to look at the order in a broader perspective.
The order is an essential part of our progress of accession to the European Communities. It must be looked at in that way and as part of the general case for doing just that. It should not be looked at as achieving only a movement in one direction or another on given tariffs. It is part of the longer case in favour of joining the larger European Economic Community. If one looks at the effects of any aspect of it one can produce a curious variety of analyses, as the right hon. Gentleman did. The net short-term effect is not very substantial in any event. On prices, the effect is downwards rather than upwards.
It is part of the longer-term fulfilment of our obligation to join the Community in pursuit of the longer-term opportunities which lie there. If we were to react today or any other day by casting aside this step in that progress we could lose out on the longer-term as well as the short-term opportunities of membership. We could, for example, lose out on the prospect of European Community markets outside our own being more rather than less buoyant than our own. The prospect for expansion in the light of the measures taken by the Chancellor is good.
The right hon. Gentleman returned to the familiar case about the pattern of trade between this country and the Community. It is right to point out that our imports from the Community in the first 11 months of this year had risen as he said by 50 per cent. although I think it is 47 per cent.—over the corresponding period of last year.

Mr. Shore: From the Six.

Sir G. Howe: In that case the figures may be slightly different. Our exports to the Community have been rising significantly faster than have those to the rest of the world—by 37 per cent. to the Community as against 24 per cent. to the rest of the world. That is an important factor, demonstrating the importance of the Community market as one in which trade should be expanding.
It is right, as the right hon. Gentleman said, that in value terms our balance of trade with the Community has deteriorated by the figures which I have indicated—but we should look at the position in terms of volume. Imports have risen at about the same rate as exports—probably less. It always takes time for changes in parities to be fully reflected in increased prices for the exports we are making and before there is any long-term improvement.

Mr. Douglas Jay: Is the right hon. and learned Gentleman aware that the balance of trade depends on value, not on volume? Does he deny that in the first 11 months of this year our visible trade with the Six has shown a deficit of about £1,000 million, whereas three years ago it was almost balanced?

Sir G. Howe: I appreciate that the figures I have been presenting relate to percentage growth in the deficit in the overall balance of trade between this country and the Community. I accept that trade depends on two factors, namely, the volume of goods and the price at which they are sold, and the balance comes out in cash terms as the value of the goods sold. But it is not unimportant that during the period of entry the volume of export trade with the Community has been growing at least as fast as imports. The picture provided by the right hon. Gentleman and his hon. Friends—of a flood of consumable goods entering this country from the Community, with this country selling nothing to the Community—is a false one, which many people seek to present. We are exporting a volume of goods which is growing as fast as the volume we are importing. Prices have risen and have to rise still further in the light of parity changes. The picture is not as black as it has been painted.

Mr. Shore: That may be so, but can the right hon. and learned Gentleman carry the analysis a bit further? Is it or is it not the case that imports of the consumer goods he has mentioned have increased? Has our trade balance in consumer goods—for example, the motor car trade with the Six—improved or grown worse during the entry period?

Sir G. Howe: It is right that we have been importing a growing excess of certain

consumer goods—motor cars among them—from the Community. That is one of the reasons why the economic effect of the Chancellor's measures today will help to reverse the trend. One of the other factors to be borne in mind is that we would be in a far better position to see expanding exports of cars from this country not just to the Six but to the whole world if we were able to get away from the industrial strife which has inhibited and impeded the growth of our motor car industry. The dominant cause, to use the simple phrase of an American motor manufacturer whom I heard on the radio the other day, is the availability and non-availability of motor cars.

Mr. Shore: Too much demand.

Sir G. Howe: Availability and non-availability are primary factors. The case for joining and being part of the Market with larger expanding opportunities remains as strong as ever it was.

Mr. Norman Buchan: Mr. Norman Buchan (Renfrew, West) rose—

Sir G. Howe: I cannot give way again. I must get on.

Mr. Buchan: It is a simple question, from a simple man.

Sir G. Howe: On that incredible premise, I shall give way.

Mr. Buchan: Is the right hon. and learned Gentleman saying that things are good because the volume of trade has increased, giving a deficit of almost £1,000 million? If the volume of trade is to continue to increase will it not increase the deficiency which we already have? Have I got it wrong?

Sir G. Howe: I am saying that alongside the measures taken with respect to the balance of demand in our own economy it is perfectly sensible and consistent to be pursuing the case that has always been argued from the Conservative side of the House in favour of accession to a larger market in which to sell more. It is a larger market with better opportunities, and we have every reason to expect that we shall sell more. The extent to which goods will sell or not sell within our own economy depends to some extent upon the balance within this economy. It certainly does not weaken the case for lowering tariff barriers and


expanding trading opportunities within a larger European Community.
I come now to the effect of the order on the various rates in question. This takes the second step towards the customs union by the further 20 per cent. cut in duties on goods from member States. It is the first cut in duties in the horticultural sector and the second for industrial products, making an effective 40 per cent. cut in the internal level of duties. Secondly, it preserves existing duty-free entry for Denmark, Ireland, the associable Commonwealth and most goods from the old EFTA.
Thirdly, it reduces duties on goods from the associates of the Six when the United Kingdom's full rate is being reduced. Otherwise it keeps them where they were and makes the first move towards the common customs tariff for imports from third countries by reducing the gap between present United Kingdom rates and the common customs tariff by 40 per cent.—20 per cent. on horticulture.
The order does not deal specifically with rates for countries outside EFTA with which the Community has agreements; for example, in the Mediterranean area. They will be dealt with by separate orders. Nor does it deal—the right hon. Gentleman was correct about this—with the main concessions under the Community's new generalised scheme of preferences because they would be effected by directly applicable Community legislation.

Mr. Shore: As I recollect it "directly applicable" means that it will be a sort of Section 2 (1) procedure whereby no order will come through us. If this is so, can the right hon. and learned Gentleman find some way of at least informing the House of the proposals and what changes affecting Britain's trade with the larger part of the Third World have been agreed or are to be agreed before the act is done?

Sir G. Howe: I have answered some questions about that. I will try to deal with it a little later on. It is not a consequence of an order under Section (2) (1). It is a consequence of Section 5 of the European Communities Act, from which it was clear that once we had completed the transition into the CCT

the level of duties would be determined by directly applicable legislation.

Mr. Nigel Spearing: Is the right hon. and learned Member aware that for three consecutive Thursdays the Leader of the House has replied to questions about this? Early Day Motion No. 88 also refers to this and asks the Leader of the House to ensure that there is a debate on the matter before a decision is reached in Brussels. The right hon. Gentleman has said that there will be time for this. The right hon. and learned Gentleman says that there will be no opportunity to debate it on an order which he would lay. Does he not think that it would be most appropriate for a debate to be held under the auspices of either himself or the Leader of the House so that we can debate this subject?

Sir G. Howe: I will draw to the attention of my right hon. Friend what the hon. Member has said. I cannot say more than that.
The other matters that do not appear in this order are the changes in the protective elements in revenue duties. Those are the subject of separate orders, three of which are already before the House and have already been considered by the merits Committee.
The other effect of the order is to deal with the classification of goods in relation to tariffs, and it completes the adoption of the CCT nomenclature begun last February. The old United Kingdom descriptions have been inserted into the new and longer Community nomenclature. Without that there would have been an impossible task of averaging duties, and it is that transitional complexity which accounts for a lot of the bulk of the order and which will largely disappear at the end of the transitional period.
The apparent complexity is in a sense a consequence of the gradualism involved in having a transitional policy. It would have been technically easier to have adopted the Community system completely and immediately.
I come to the effect of tariff levels on particular goods. The CCT for industrial goods is generally lower than the level of the United Kingdom full rate, so that will tend to move down on 1st January.


But some things will go up and some down. Duties within the Community will move downwards. Supplies from the developed Commonwealth which were previously duty-free will now bear 40 per cent. of the CCT. But those are not very important sources. Goods from the developing Commonwealth are largely duty-free under either the GSP arrangements, which are still being negotiated, or under the standstill. I will return to this as it affects the Mediterranean countries, such as Israel, later.
When we turn to foodstuffs the matter is not as simple as the right hon. Member sought to argue. It is important to get the perspective right. Only about half our total imported food and drink is in any event subject to duty, and of that amount, for a variety of exceptional reasons, a large proportion bears no duty. Duties on food from the Six will be going down, and that is an important area affecting many horticultural products. It was concern at the downward price movement of that kind which led us to establish a long and generous transitional arrangement for horticultural products.
For the associable Commonwealth, duty-free access is also maintained. With the new GSP scheme we have been able to obtain a number of arrangements, to which I shall return, for continued liberal access without anything like the full rate of duty on a range of commodities, including coffee, cocoa butter and pineapples.
The examples given by the right hon. Member taking Israel as an example serve to show how easy it is to be misled about these things. For the Mediterranean States, with which association agreements exist, agreements either have been, or are being, worked out to apply to this country the existing agreements which they had with the old Community. Insofar as those have not yet been completed, they will all be the subject of a standstill order so that no change will take place on 1st January. For example, the agreements with Israel would be subject to a standstill on duty increases for the time being until they have been finalised.

Mr. Shore: I accept that. We all understand that in the past month there have been grave difficulties in negotiating with the Mediterranean countries, including

Israel. But surely the order of magnitude for the figures I gave—assuming that negotiations can be resumed in a fairly reasonable time—is correct, together with the increase in prices which I have outlined.

Sir G. Howe: No. With respect to the number of commodities from countries where we have association agreements or where there will be such agreements, the figures are not likely to be as high, or generally as high, as the right hon. Gentleman is saying. In a number of cases—I would not want to give a general answer, because sometimes it will be up and sometimes down—there will be preferential rates established, varying from country to country. These will be better rates than those arising from alignment towards the CCT. This is why we have to look at the totality of the changes to see the overall effect of them.
Beef is not dealt with by the order. It is subject to the levies anyway, and any change takes place by different arrangement on 1st April. It is right to acknowledge that with lamb a change is being made.
But when one looks at these matters in total and tries to establish the overall effect, one finds that most individual changes will be relatively small. In any event, some increase will be absorbed by overseas suppliers anxious to hold on to their markets. Some decreases will benefit overseas suppliers. The net across-the-board effect ought to be downward. Within this, food prices might rise marginally, but it is impossible to be precise. However, it is estimated that the effect of this step towards the common external tariff on 1st January in relation to food is likely to be no more than ¼ per cent. to ½ per cent. I emphasise that that is on the food price index. The effect will be about 0·1 per cent. on prices altogether. Thus, if we set the upward trend in the food prices affected alongside the downward effect in the movement of other prices involved, we find that the net effect is likely to be downwards rather than upwards. That is why it is so wrong for the right hon. Gentleman to present this order as a monstrous taxing exercise. It is quite the reverse.

Mr. Jay: Is the right hon. and learned Gentleman sure that he is right in saying that the order does not make any change


in the case of beef? On pages 9 to 12 there appear to be a number of changes in relation to various types of beef.

Sir G. Howe: I believe that I have given the correct answer. The point raised by the right hon. Gentleman may not lead to the conclusion that he suggests, but I will look at the matter and he will get his answer. I am not speaking without having tried to analyse the situation. What I have said reflects what I believe to be the position.

Mr. Richard Body: While I accept that the order will have the net effect of reducing the duties on food imported from the rest of the EEC itself, does it necessarily follow that it will have the effect of reducing the prices of that food? Once the duty is reduced, it will displace imports from third countries which could send the food to us more cheaply.

Sir G. Howe: I hesitate to make such a simple observation to my hon. Friend, but my critics cannot have it both ways. If they say that placing a tariff on imports which would otherwise come in free will mean an upward trend in prices, it follows that the opposite course must have a downward effect. The reduction of tariffs in general is likely to lead to a reduction in prices.
What is the broad pattern of change of the GSP? The Summit directive looked forward to:
… improvement of generalised preferences with the aim of achieving a steady increase in imports of manufactures from developing countries.
Our objective has been maximum access for the products of the developing countries. We have been particularly anxious to safeguard the interests of developing Asian Commonwealth countries—those covered by the declaration of intent and not eligible for associate status.
We accept that the scheme of the Nine first of all took account of the interests of the original members with their different traditions, and that we, therefore, have to secure adjustments in that as we come alongside it. We have achieved a number of improvements in the original scheme. We hope that the new scheme will provide additional opportunities to the developing world as a whole, and the Asian Commonwealth in particular.

One hopes to see further improvements in the years ahead because the matter will constantly be available for renegotiation and there will also be opportunities in the multilateral negotiations.
The main difference between the two schemes is that the Community scheme produced access for some industrial products limited by quotas with restrictions on the quota share effected by "butoirs", while the United Kingdom scheme has a general safeguard provision. We have a wider coverage of agricultural products but exclude textiles and hydrocarbons.
In the course of negotiations, substantial concessions have been negotiated in the Community's scheme. For example, we have been able to produce special arrangements in relation to plywood, which is of particular interest to Malaysia. We have been able to secure arrangements in relation to cocoa butter, soluble coffee and canned pineapple in our case for larger tariff quotas, with the lion's share of the quotas coming to this country.
We have obtained a number or smaller concessions—for example, on coconut oil, cashew nuts, prawns, shrimps and so on. We are hoping to secure further improvements, for example, for tobacco, which is of importance to the larger countries in the Indian area. In the Community there is now agreement on a commercial agreement. Jute from India is included in the GSP and we have the continuance of duty-free entry to the United Kingdom. That is likely to be extended to Bangladesh.

Mr. Shore: Did the right hon. and learned Gentleman mean jute or jute manufactured goods?

Sir G. Howe: Both jute and jute manufactured goods. We have secured the same pricing pattern for the protections which already exist and no additional ones. Parallel arrangements are being worked out with Bangladesh.
We must not, in our reaction to the economic news of the last week or so, overlook the longer-term objectives and opportunities to which the House and the country have been committed in Europe for a number of years, in our membership of the EEC. The changes to be made in


that direction are to be taken as a series of steps. What we are dealing with tonight is one step, but an important step, in the process of achieving that customs union which is part of the objective of European economic integration. We shall be helping to lay the foundations for that in favour of which we in this House voted so decisively two years ago. It is upon that basis that I commend the order to the House.

8.19 p.m.

Mr. Alfred Morris: The Minister for Trade and Consumer Affairs must have felt extremely lonely as he spoke. There are as many dour opponents behind him as there are facing him from the Opposition benches.
The right hon. and learned Gentleman's reply to the compelling case made by my right hon. Friend the Member for Stepney (Mr. Shore) was totally inadequate. The right hon. and learned Gentleman spoke evasively and at times even flippantly. His speech will rank as not only the most curious but also the most indefensible by a Minister for Consumer Affairs. He spoke much more like a lapdog than as a consumers' watchdog. We are not impressed by his clever manipulation of statistics. In any case, my right hon. Friend was not speaking only of the import duties in this particular order but of the whole objectionable system of which they form part.
In this debate, as my right hon. Friend has amply shown, we are dealing with more important causes of the present crisis than anything to which the Chancellor of the Exchequer referred this afternoon. My right hon. Friend spoke of the huge losses on our balance of payments in direct consequence of membership of the European Economic Community. There is the further and related scandal, to which my right hon. Friend also referred, of the Government's blanket acceptance of the common agricultural policy of the EEC. It is that scandal to which I wish principally to refer.
We must now act to stop paying prices far above those at which food can be economically produced. The whole of the Government's policy on food prices is a dangerous nonsense. Its effect is to trap the British economy in a vicious

circle. The more we pay for the food we import, the more we worsen our balance of payments and further gravely weaken the pound. The more we devalue our currency by sinking the pound, the more we pay in sterling for the unnecessarily high-priced food we are forced to import.
Where he is not evasive the right hon. and learned Gentleman simply repeats the Government's lame excuses for failing to deal with the staggering increase of 44·8 per cent. in food prices since the General Election. As everyone knows in his heart, most people in all parties now want urgent and drastic changes in the EEC's food and farming policies. They are heartily sick of subsidising the EEC's butter exports to Russia and of all the other absurdities to which we have become subjected. Why on earth should the already harassed British housewife have to subsidise food exports to the point where Russia now has to pay only 5p a pound for EEC butter? The right hon. and learned Gentleman has no real answer, but housewives throughout the country are demanding an answer and an end to the price explosion. There have been more than 30,000 price increases since the General Election. That is the appalling extent of the Government's failure to keep their election pledge.
If the Minister wants to compare rises in the price of food in Britain and Norway—whose people at least had the chance of voting to stay out of the EEC—he can consult a recent parliamentary reply to one of his hon. Friends. Between 1972 and 1973, food prices in Britain went up by 15·1 per cent. and in Norway the increase was only 5·2 per cent. Norway is not the only country to be compared with Britain in that reply. For Switzerland the increase was even less—at only 5 per cent. In Sweden it was only 5·8 per cent. As my right hon. Friend the Member for Battersea, North (Mr. Jay) intervenes to remind us, they are all countries outside the EEC.
The reply to which I referred was received by the hon. Member for Holland with Boston (Mr. Body). It fully documents the case we have been making in the House about the effect on our food prices of our membership of the EEC. The reply came from the Parliamentary Secretary to the Ministry of Agriculture. Fisheries and Food to her hon. Friend.


Her figures are much more eloquent and convincing than the right hon. and learned Gentleman's apologia tonight.
I appreciate that the right hon. and learned Gentleman was unable to refer to sugar. Nevertheless, there are those of us on both sides of the House who are deeply anxious not only for the future of the Commonwealth Sugar Agreement but for the very existence of the International Sugar Agreement. It was put to me only today that there is great anxiety among our friends in the developing Commonwealth countries about the EEC's attitude to the new administrative ISA. I ask the Minister to ensure that the Chancellor of the Duchy of Lancaster makes a statement to the House at the earliest possible opportunity on the EEC's present attitude to the new administrative International Sugar Agreement.
Far from exaggerating, my right hon. Friend spoke with studied moderation. I hope that the House as a whole will take all his points much more seriously than the Minister did. We must put an end to unnecessary increases in food prices. The import duties before us are part of a whole system which those of us on both sides who object to the conditions negotiated for British entry to the EEC want to dismantle. The need is urgent. Indeed, urgency has never been more urgent.

8.26 p.m.

Mr. Neil Marten: I support what the hon. Member for Machester, Wythenshawe (Mr. Alfred Morris) said about the International Sugar Agreement. The point he raised very briefly is most important.
With regard to what the hon. Gentleman said about the increase in the price of food as between the EFTA members and the EEC members, there was another Written Answer—I think it was in HANSARD last week—which I received from the Minister and which showed that food prices in the Common Market have risen about three times as fast as those in EFTA, if we exclude the associate member, Finland, as I think we can, and Iceland, which is a very new member and has a particular problem about fish.

Mr. Alfred Morris: I must consult the reply given to the hon. Gentleman. For the guidance of the House, I should like to say that the reply to which I referred

in my speech was given by the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food to the hon. Member for Holland with Boston (Mr. Body) on 9th November, and appeared in Volume 863 of HANSARD, at column 290.

Mr. Marten: I am grateful for that intervention, because it allows me to explain that when I saw that answer I did not think that the dates for which my hon. Friend asked were quite the best. I asked about the rise in prices from 1st January, when we joined the Common Market. I worked out from the answer that Common Market food prices rose three times as fast as those in the genuine old EFTA club to which we belonged, and to which I wished we still belonged.
I return to the Prayer. Many of the remarks made by the right hon. Member for Stepney (Mr. Shore) covered my feelings about the whole question. What he said about the balance of trade with the Common Market is true. Many hopes that were held out to those who were encouraged to vote for entry are now falling flat on their faces. They are not materialising. It may be out of order to quote the word used in the front page headline of The Guardian today—[HON. MEMBERS: "No; it is a good word."] It was a good word, but I ask hon. Members to read The Guardian to save me the embarrassment of quoting that extraordinarily apt description of the Community.
I want tonight to speak on a limited theme. I take it as an example, but the argument follows what the right hon. Member for Stepney said. I wish to refer only to the 8 per cent. tax on imported lamb. My hon. Friends and I have been fighting to prevent this tax, and Motion No. 48 has been signed by 30 right hon. and hon. Gentlemen on the Government side of the House objecting to that 8 per cent. tax on imported lamb.
Paragraph 15 of the consultative document of the Government's counter-inflation policy clearly sets out that pay increases for the group should be 7 per cent., yet the Government themselves propose a tax of 8 per cent. on imported lamb, and that must be outside the spirit of phase 3. In many households, when they can afford it, lamb is the traditional Sunday lunch. When short of housekeeping money, which is fairly often


these days, my wife, when I ask for beef on a Sunday, says that it would be much cheaper to have lamb, and we have some excellent New Zealand lamb when we can afford it. But there are other families who cannot always afford a joint on a Sunday and it is absurd that an 8 per cent. tax on lamb should be imposed at this very time when the Government are trying to keep down the cost of food. This tax is especially important for families like that.
I hope that the Government will frankly admit that this tax is entirely the result of our membership of the Common Market. The population of this country must be made to realise that that is the cause of this extra tax.
Some time ago, I asked the Prime Minister why we had to impose this tax, and he straightforwardly replied that it was because of the Common Market.
On 13th November I had the opportunity to catch Mr. Speaker's eye and I was able to ask the question again, and my right hon. Friend then replied that the tax was being considered. Some of us were rather pleased about that and thought that perhaps our questioning and pressure were beginning to take effect. We thought that, if not at the summit meeting, at some lesser meeting of the Council of Ministers, our Ministers would be fighting for the British housewife and the British family and to stop this 8 per cent. tax.
I should like my hon. Friend the Under-Secretary to say—he may not know the answers—what was done when the Prime Minister said that the matter was being considered. Was the Common Market approached? If so, when and who was approached? Did we ask specifically, and is there a record anywhere of the possibly secret meetings of the Council of Ministers to show that we asked to be relieved of this tax in view of our domestic circumstances? Did we try to renegotiate this aspect and finally did we say that whatever the Council of Ministers said we should not impose it? Did we take a tough line for the housewives of Britain? I fear that the answer may be that we did not go as far as that, and the reason for that was that we had already lost our sovereignty in that respect.
When they know that they have to pay 8 per cent. more, or however it works out, the housewives of Britain will be angry. Speeches will be made about it, so that they will know that it is entirely due to our joining the Common Market. It is curious that it should be imposed at this very moment, because for the past few months if the Government have done anything, they have done their best—with little ammunition—to make the Common Market popular in this country. It is, as every poll tells us, very unpopular and is getting more unpopular almost every day. The Government wish to make it popular, but in fact they make it more unpopular with every housewife.
Hon. Members will know—because I have mentioned it in the House before—that the Conservative Central Office is joining in the propaganda to show what a splendid thing the Common Market is. Each week it publishes—and it now acknowledges that it publishes it—a "Europoint". It says, "Joining the Common Market was a jolly good thing: here is a point". One or two matters have not been presented in fairness, and I have written to the Chairman of the Conservative Party and to the Chancellor of the Duchy of Lancaster about the matter. It is said that the steel industry has been given a loan of £13·4 million and that £3·5 million has been given for the development of something else. One would imagine that that was very good for this country. But we are not told that we have had to contribute £45 million in return. The full commitment is a contribution of £225 million to the European banks. This is very bad business.
All I am trying to illustrate is the strong desire of many Members on the Government side of the House, who mostly support the Government, except on the Common Market issue, that this "Europointage" should be presented absolutely fairly. I therefore hope that Europoint No. 10 will be about the 8 per cent. tax on lamb.
If I vote against the order—and I hope that the Government Whip sitting on the Front Bench has noted that—I make it clear that I shall do so simply because I oppose the imposition of an unnecessary tax on food, particularly at this time. I have made that clear in my constituency, and I must be as good as


my word to my constituents. The Government must be aware of my attitude because of my questions to the Prime Minister and the motion on the Order Paper. It will therefore come as no surprise to them if I vote against the order.

Mr. Arthur Lewis: The hon. Gentleman will be in good company, because I remember reading the Prime Minister's election address, in which he said that he would cut prices, particularly food prices. Therefore, will not the hon. Gentleman be supporting the Prime Minister's excellent statement that if he were returned to power, as he was, he would cut food prices?

Mr. Marten: I cannot see my right hon. Friend the Prime Minister voting with the hon. Member tonight, but I know that he would find it agreeable.
The Government are aware of my opposition to the Common Market and to the food tax on lamb. My right hon. and learned Friend the Minister for Trade and Consumer Affairs recognised that the opposition to the order was logical for those who oppose entry to the Common Market. I appreciate that and I am grateful for it, because throughout the debates on the Common Market we have been well treated by members of the Government Front Bench, who have accepted that our opposition comes from the heart and is for the best of motives for our country. That has always been the spirit in which our debates have been conducted. I hope that if I vote against the order tonight my vote will be taken in a similar spirit.

8.39 p.m.

Mr. Douglas Jay: I can help the hon. Member for Banbury (Mr. Marten) in one respect. He asked whether there was any reason other than the Common Market for imposing the food taxes included in the order. It is stated on the first page of the order—this is one of the clearest things in it—
This Order does not increase duties of customs other than in pursuance of a Community obligation.
That makes it quite clear, and it might perhaps be included in one of the Euro "fables" put out by the Conservative Central Office.
The Minister's speech made it easier for us all to understand why the country is in such a disastrous situation. What

an incredible moment this is for the Government to introduce the widest series of new food taxes that we have known for generations past.
There is no defence for these new and increased taxes. They have no purpose other than fulfilling a Community obligation. Their only effect will be gratuitously to force up the cost of living and make any fair incomes policy unacceptable. We are being asked in a mere three hours' debate to abandon the policy of untaxed food that has been broadly in force with all-party support for 100 years and more. Perhaps we might rely on the Members of the Liberal Party, who were here in depth earlier but have not stayed for an answer or to exert their full strength in the lobby—

Mr. Arthur Lewis: In my constituency I have a Liberal opponent who tells me that the Liberals are anxious to bring down the price of food and the cost of living. Is my right hon. Friend saying that by their support of entry into the Common Market Liberal supporters are responsible for the increase in the price of food?

Mr. Jay: My hon. Friend knows how the Members of the Liberal Party voted in all the crucial Divisions two years ago. I should be out of order in pursuing that too far, but I am in order in advising my hon. Friends to observe how any Liberals present in the House may vote this evening.

Mr. Arthur Lewis: They are not here.

Mr. Jay: I know they are not here, but they might conceivable be somewhere else in the building.
Let everyone realise that the new import duties on food included in the order are additional to the levies imposed on these and other foodstuffs in ways other than by the order. The increases are introduced not for a good reason connected with British interests but because of the Prime Minister's abject surrender to Mr. Pompidou. That is why these import duties and levies on butter and cheese amounting to 50 per cent. are being imposed. Nor is it any excuse to say that the duties on some foods included in the order are going down while others are going up. Taxes on essential food should not go up, whether or not others


are going down. No such tax should be in force, least of all at a time like the present. There is no substance in what the Minister said about there being a net fall on balance. The House will observe that he found it impossible to apply that remark to food. He admitted that on food there would be a net increase.
It cannot be said that the increases are trivial or that they apply only to secondary foods. Although the Government may hope to conceal the reality by the vast and confusing complexity of the order, it is instantly damaging in itself and contrasts with the relatively simple import tariffs which we have had until now. The reality is that on a whole series of essential foodstuffs new and increased tariffs are imposed by the order on our supplies from virtually the whole of the old Commonwealth, from parts of the Asian Commonwealth and even in some cases from other EFTA countries.
The right hon. and learned Gentleman appeared to say that there was no increased tax on beef. If the order does not impose an additional import duty on beef either in January or March next year the Minister is introducing into the House an unintelligible order, but no doubt he will explain that later.
As I see it, a new tariff is imposed on beef supplies coming from the old Commonwealth, starting at 4 per cent. and due to rise eventually to 20 per cent. That applies to imports from Australia, which is an important producer and exporter of meat, and whose importance as a meat-exporting country is increasing. On mutton and lamb there will be a tariff of 8 per cent., plus a specific duty that before long will rise to 20 per cent. It seems to me to be an act of near insanity in economic policy deliberately to deprive the British consumer of low-cost supplies of lamb from Australia and New Zealand, since those countries are the world's most efficient producers of mutton and lamb. Furthermore, those commodities are not produced or consumed on any substantial scale in EEC countries. The only purpose of this provision will be to force up lamb prices in case people eat mutton and lamb instead of beef—as a result of which, horrible to relate, the price of beef might come down! That is the only purpose I can see for this extraordinary new tax.
For fish of almost all kinds there is to be a new tariff apparently affecting in some cases even supplies from EFTA countries and associated Commonwealth countries. Perhaps the Minister will explain the purpose of an increased tax on fish supplies from EFTA or even associated Commonwealth countries. The same can be said of eggs, potatoes and most other vegetables, where apparently there are also to be increases applying even to some EFTA countries. There is also to be a new tax on bananas and oranges as well as on tinned fruit—bananas and oranges previously being tax-free. In other words, there is to be a new tax on all supplies from outside the EEC and associated countries. Can the Minister confirm that there will be no tax on bananas from the Caribbean Commonwealth countries?
Will the Minister also explain why apparently some categories of tea from the Asian Commonwealth will have to pay a new duty? Can we at least assume that the vast bulk of normal tea supplies from India, Pakistan, Bangladesh and Ceylon will continue to come into the country tax-free? This is a commodity that is not produced in the EEC countries and is not consumed on the Continent in anything like the quantity in which it is consumed in the United Kingdom. Therefore, it is difficult to imagine any purpose in imposing an import tax on tea.
May we be told why certain categories of maize imported into this country will attract duty when we know that the high price of feeding stuffs is now imposing a great burden on the British farmer and is forcing up prices generally? What is the purpose of that duty?
If all these matters were contained in a Finance Bill, no doubt we should be spending hours, and indeed days, in probing each individual commodity and finding out what was happening. Instead of such an exercise, we are being asked today to judge 770 pages of tariff changes in only three hours. On top of all these items margarine is to bear a 10 per cent. import duty. Is this to ensure that the consumer will be able to find no alternative to buying the dear butter that is available in the Community? If there is some other reason for taxing margarine, perhaps we shall be told.
In addition, there are to be new duties on manufactured meat and fish products, sugar confectionery, malt extract and even salt, apart from a number of other secondary foodstuffs. The prices of all these foods will be forced up not by world prices, as we are told so often, but by the deliberate decision of the Government in introducing this battery of taxes on essential foods. To my mind, it would be almost impossible to imagine a more reactionary, more divisive and more stupid policy than to introduce a gratuitous régime of dear food enforced by taxation at this of all moments.
When the Prime Minister makes his appeals for justice, fair play and national unity in his TV appearances or even in this House he does not mention that behind his back he is deliberately introducing a dear food policy. This order undermines and disproves entirely the sincerity of the right hon. Gentleman's appeal for national unity.
I am a believer in a fair and workable incomes policy, but I am not in favour of enforcing anything like stage 3 and at the same time introducing this order. The order alone would justify organised groups of workers in resisting stage 3, and that is why the Prime Minister never mentions these food taxes in any of his speeches.
This House could contribute to the economic recovery of this country if it took its opportunity tonight to throw out this order root and branch. People are beginning to talk a good deal about subsidising food. But what is the sense of taxing food and subsidising it at the same time? Let us at least get rid of the food taxes and levies first. After that we can talk about food subsidies. Let us begin by throwing out this indefensible order.

8.53 p.m.

Mr. Ronald Bell: This order is the first instalment of the imposition of duties upon foodstuffs entering the country in accordance with the EEC Accession Treaty. We have already come to live with levies, intervention boards and all the consequences flowing from them. With the order we start upon a new path, that of direct entry taxes on food.
We have known for some time the general shape of the Community agreement, but when we look at some of the taxes in the order—those on lamb, margarine and fish products—we are not considering taxes which are self-evidently imposed for the protection of some intra-Community activity. We shall not get lamb from the Community, nor fish products, nor margarine, which is in its origin a tropical product. Therefore, the duties can only be imposed at best for some indirect Community purpose progressively to shut us off from these sources of foods in order that we may concentrate our consumption on those which are produced in Western Europe.
When considering and assessing the overall effect of the order, my right hon. and learned Friend must bear in mind that there is a lack of substitution. We are not raising the price of lamb from New Zealand and replacing it with lamb from France. If the price of lamb from New Zealand is raised, either people will pay the full amount of that increase or they will have to buy beef or another product.
My right hon. and learned Friend must also remember that one of the disadvantages of this procedure is that we cannot pick upon particular items, as we could in the Finance Bill, and say "Yes, there are some good things in the order but we do not like some matters." We are asked to take approximately 800 matters and pass them all or reject them all. It is a bit much for my right hon. and learned Friend to say that we must set off one against the other, make a final addition and pass the order. That may be the result of the procedure, but it should not be.
The order, on the face of it, is made in the execution of Community obligations. My right hon. and learned Friend deprecated any reliance upon an argument which was inconsistent with the obligations which we assumed on accession. When the European Economic Community Bill was passing through the House we were assured over and over again that the sovereignty of Parliament was not being taken away from us and that ultimate sovereignty would remain with Parliament.
When we asked whether we would be hauled before the Community Court for


breach of our obligations if we did not agree with some of the Commission's proposals, we were told repeatedly that we did not understand the spirit of the Community. We were told that that was not the way in which it worked. We were told that everything was sweetness and light, that there was tolerance and understanding. We were told over and over again that we could not be forced to do anything which we did not want to do. That phrase was heavily relied upon, and I rely upon it tonight.
If it were true, as we were assured by people whom we had every right to believe and trust, that sovereignty would remain with Parliament and that we could not be forced to do anything which we did not want to do, now is the occasion to put those assurances to the test. I have no access to the inner records of the European Community, but I have no doubt—and my hon. Friend the Member for Banbury (Mr. Marten) asked the question—that our Ministers were beavering away trying to persuade the Community not to require an 8 per cent. duty on lamb. What British Government would want an 8 per cent. duty on lamb? Why would they want it? Why would they want such a duty on margarine or on fish products such as herrings and tomato sauce?
British Governments do not want duties on anything like that. Of course, the Government argued that duties should not be imposed; they were unsuccessful. They have a lot of things to ask for and they cannot have them all. This is rather near to the Ark of the Covenant for the real Marketeers of the Continent. They do not want to do it.
My intention tonight is to help to do for the Government something which the Government would find it embarrassing to do themselves. It is in that spirit of helpfulness and co-operation, at a time when co-operation of that kind is more called for than ever before, and upon an assessment of the priorities which I am sure will commend itself to my right hon. Friends, that I shall take the step that I propose to take tonight.
I was a little sorry that my right hon. and learned Friend sought to minimise, or perhaps I should say lessen, the importance of the short-term problem in relation to the long-term opportunities.

I have a slight advantage over my right hon. and learned Friend, in that I do not believe in the long-term opportunities. I insist that the problems facing this country, and which preoccupied us earlier today, are relatively short term. Some may say that they will be with us for three months, others may say that they will last for a year, and others again may argue that they will be with us for two years. But it is the short term with which we are essentially concerned and which ought to have complete priority. It is in that spirit of helpfulness, and that estimation of priorities, that I shall vote in favour of the motion tonight.

9.1 p.m.

Mr. E. Fernyhough: When the Minister replied to my right hon. Friend the Member for Stepney (Mr. Shore), his attitude towards the decision that we have to make tonight was very much in keeping with his attitude when he was pushing through the Industrial Relations Bill. The right hon. and learned Gentleman used to tell us that once the Bill became a statute everything would be lovely, peaceful and happy, and there would be no more turmoil.
The right hon. and learned Gentleman tried tonight to tell us that these new regulations—these new impositions—will have an infinitesimal effect on food prices. He says that it will amount to between ½ per cent. and 1 per cent., but he has not told us what ½ per cent. or 1 per cent. means in total, and until we know that we cannot measure how injurious the result will be.
But what we know is that today the Chancellor made a serious statement to the House. The Chancellor is concerned about inflation, and so concerned and determined is he to fight it that he is prepared to stand up to the miners, the railwaymen and the electricians even though the bill to get them working full time again would not be one-quarter of what these regulations will cost the country. The Government's sense of priorities is fantastic. They could settle our industrial troubles for one quarter of the amount that they are to impose upon the British people on 1st January by way of extra food taxes.
The Prime Minister told us last Thursday, in a speech that was as amazing as the Chancellor's today, that from 1st


January people will be working on short time, for three days a week. What a marvellous way in which to get the workers to co-operate! Their wages are to be cut, and their food is to be taxed. In other words, their food bills will go up while their incomes go down. What did the Minister say? This is what the Government want because it will provide the necessary export capacity. We take things from our own people and send them abroad.
If I could ask for one power, it would be the power to make the right hon. and learned Gentleman read the last speech that I made before we signed the Treaty of Accession. It would do him a world of good. Every forecast that I then made has proved correct. Every forecast that the Minister then made has proved to be wrong.
As the hon. Member for Banbury (Mr. Marten) said, it is not only that we apparently never have a victory or never get our way; it is the marvellous manner in which every Minister who defends these defeats turns them into victories. We have had only one victory. That occurred last week. The Minister of Agriculture was able to prevent the EEC putting over the idea that to use up the butter stocks we should insist on butter being put into ice-cream. That is the greatest victory that we have had. That was the one time when we stood and said what the contents of a particular commodity shall be. Our Minister said "No butter", because that would have been an impossible position for him to defend. He can defend an 8 per cent. increase in the price of lamb and increases in the prices of tinned salmon and tinned fruit without qualms or difficulties. But we put up a great fight on the question of the content of ice-cream.
In relation to the source of these regulations, we had a Summit conference last weekend. The Prime Minister attended that conference. What was the Prime Minister talking about in Copenhagen? I am sure that he must have discussed Britain's immediate economic problems. Why was he not telling the representatives of the eight other EEC countries that we could not accept this kind of thing, particularly at present? Just as Ministers bring nothing back from Brussels except defeat for the British

public, it seems that the Prime Minister lost on every issue in Copenhagen. We were to have had a £l,500-million-a-year regional policy. The latest figure has dropped to £50 million. We can be almost certain that we shall get nothing out of it.
Does the right hon. and learned Gentleman really believe that this debate, which is likely to be widely reported, will help to sweeten the soured industrial situation at a time when, as a result of the mismanagement of the economy, the Government are trying to place all the responsibility for the economic situation on the miners, and at a time when the overwhelming majority of trade unionists in Britain believe that they have not had a fair deal from the Government? Does the Minister believe that this is the time for him to announce that another few hundred million pounds will be added to the food bill next year? Does he believe that the public will enjoy paying that bill all the more when the money will not be spent in Britain because when we have collected it we shall have to send it across the water to the EEC?
To impose taxes upon our people but for us not to have the right to say what shall be done with the money when it is collected, to impose taxes at the ports on any imports and not to have control of those taxes, is giving away not only the rights of Parliament but the rights of the British people. I tell the right hon. and learned Gentleman that if he and his colleagues continue with a policy of this kind, the difficulties that Britain face today will be the bigger the longer the Government stay in office.

9.10 p.m.

Mr, Roger Moate: Any order which imposed an 8 per cent. tax on imported lamb from New Zealand would be objectionable. But today, as many hon. Members have pointed out, it is extraordinary to seek to introduce an order of this nature.
Earlier today the Chancellor of the Exchequer told the House and the nation of the many sacrifices that we shall be called upon to make in the coming months. Within a few hours of that statement the Government are seeking to introduce an order imposing an 8 per cent. tax on lamb. It is an extra burden to be placed on the British people,


leading to the inevitable effect of increasing the cost of the Sunday joint.
What is extraordinary is that it is an avoidable burden. At a time when the Government, rightly, have been saying that the higher food costs are the direct result of world prices, we are introducing something that is avoidable. My right hon. and learned Friend sought to show that the Government were taking into account the advantages and disadvantages and that the order might be beneficial to our cost of living. That may or may not be the case.

Mr. Peter Rees: Is it, or is it not, the case?

Mr. Moate: If my hon. and learned Friend had heard my right hon. and learned Friend—

Mr. Rees: I did.

Mr. Moate: —he would know that there is a substantial area of doubt. There is no doubt about the positive effect on the cost of food in that respect. The Government have made it clear that the cost of food, as a result of the order, will go up by ½ per cent.—[An HON. MEMBER: "Or 1 per cent."] Indeed, perhaps by 1 per cent.

Sir G. Howe: Since the error has been repeated, the figure I gave was ¼ per cent. to ½ per cent.

Mr. Moate: I accept my right hon. and learned Friend's correction. I am pleased that he was able to furnish the figure because, when I tabled a Written Question exactly to that point, the Minister of Agriculture, Fisheries and Food—

Mr. Arthur Lewis: Is it not the case that Ministers' figures are always proved wrong? We were continually told that there would never be a 15p loaf—that it was never possible. Their figures are always wrong.

Mr. Moate: It is obviously difficult to quantify these matters, but what is not in dispute is the fact that this order, certainly as it applies to lamb and other foodstuffs, will create an increase.
The Government are seeking to impose the order at a time when we should be avoiding increases of this nature. If the rest of the order were beneficial, and

that were the single adverse point, I would still say that it was objectionable on that basis. If the Government say that that is unreasonable, I say that the procedure that brings forward an order of this nature, 722 pages long, incorporating many items of an objectionable nature, is also unreasonable. I do not think that the Government will be surprised to learn that many hon. Members on their side of the House cannot vote in support of something that imposes food taxes at this time.
The right hon. Member for Stepney (Mr. Shore) pointed out earlier the effect of the order on New Zealand. The New Zealand Meat Board Development Committee has given instructions to the meat producers to divert their supplies to other countries. It is possible that a major diversion would mean that the net price increase to housewives in this country would not be felt in the short term, but that is hardly an attractive alternative—on the one hand being faced with a price increase of 8 per cent., rising to 20 per cent.—that should not be overlooked—or, on the other, diversion of our traditional lamb supplies to other countries, including Japan, other parts of the Far East and other European countries. This diversion conforms with the direct public instructions of the New Zealand Meat Board Development Committee. I do not believe my right hon. and learned Friend's heart is in defending this order.
If that were the sole objection to the order, it would be enough for the House to reject it. But I also do not think that we should overlook the general significance of the order in its implications for our industrial tariff policy. We are moving towards a situation which is fundamentally objectionable to the philosophy that we have been pursuing for some years.
My right hon. and learned Friend argued that a reduction of tariffs was very beneficial to us in our trade with Europe, and that it would help us expand our opportunities within this large market, but if that is true for Europe, why is it not also true of the other markets with which we have habitually traded? Why are we using this opportunity to raise industrial tariffs—a fact that my right hon. and learned Friend cannot deny—on imports from many other countries?

Mr. Ronald Bell: Will my hon. Friend also bear in mind that the initial effect of the lowering of tariffs between ourselves and the Community countries has been the emergence of an enormous deficit in our balance of trade, and that, presumably, lowering them even more will exaggerate it?

Mr. Moate: I shall not dispute that it is often advantageous to this country to reduce the level of protection, but no country faced with a massive deficit of £1,000 million, with very poor prospects in the coming months, would reduce tariffs against that market at this time. Yet we are forced to do so by the obligations into which we have apparently entered. I would argue in general terms that this commitment to raise tariffs against many of our traditional trading partners, as embodied in the order, is objectionable.
We should recall the attitude of the French Government in the recent negotiations leading up to the preparation of a position for the GATT talks. An American objective was then stated, that we should work towards zero tariffs. This, broadly, fits in with the philosophy of our Government. But the French made it clear that the tariffs should not be allowed to fall below a minimum level because they had a political as well as an economic purpose.
So we have a broad clash of philosophy between the British position, which, broadly, is a belief in reducing international tariffs, and the French, who wish to see the common external tariff retained as an important foundation of the EEC. At some point this clash has to be resolved, and it must be resolved in our favour, not just because it is a British interest but because it is a world interest to try to bring down the level of industrial tariffs.
I regret that the Government have introduced the order. I had hoped from the reply of the Prime Minister that, in the situation of crisis that we are facing, the Government would say that they would not persist with this imposition at this time. I am sure that my right hon. and learned Friend must understand that those of us who have been pressing for some months on this question, particularly the tax on lamb and the general imposition of increased food taxes—

which is what the order is about—could not be expected to support the Government in the Lobby tonight.

9.18 p.m.

Mr. Nigel Spearing: It is a coincidence that this debate follows upon the announcement earlier today. But I fear that it may not be generally known in the country that if the order is passed it will subject the British public to considerable taxation. We have heard about 8 per cent. on lamb and an unknown percentage on beef. My calculations show that the tax on tinned foods will total about £4 million—not an inconsiderable sum.
Any Government supporters who vote against the motion and, therefore, for the order will, if the time comes shortly—some people think that this is what the Government are at least manoeuvring for—have to show their constituents why they voted for increased food taxes in the Christmas Budget of 1973. That Budget will probably go down in British history as a turning point.
Some time ago, when the Prime Minister was interviewed on ITV before the Common Market decision had been taken, the interviewer asked:
Will the people be able to earn more to pay for the extra food costs which we expect under the Common Market?
In his inimitable way, the Prime Minister replied:
Yes, people will have the opportunity of earning more.
The word "opportunity" falls very easily from the lips of many hon. Members on the Government benches. Many people have the opportunity of getting a prize from Premium bonds, but that does not mean that the odds in favour of their doing so are very high. But now, rather than having the opportunity to earn more in 1974 to help pay for increased costs, it seems that the reverse will be the case.

Mr. Peter Rees: Mr. Peter Rees rose—

Mr. Spearing: I shall not give way, because time is short. The hon. and learned Gentleman voted for the impasse in which we find ourselves, and he has not been present during the whole debate. The Minister, in opening, said he thought that there would be an increase to ¼ per cent. to ½ per cent. in the cost of foodstuffs. He did not give a


global sum in pounds, and I hope that in concluding the Under-Secretary will do so, because it is essential that the Government should tell us their estimate of what extra housewives will have to pay after 1st January. The right hon. and learned Gentleman said that his estimate depends upon certain prices going down. He expects that the benefit of cuts in tariffs on imports from the Common Market will be passed on to the consumer. Does he not know the principles of his own supporters on a free market in food? If the cost of imports goes down because of a cut in tariffs, the saving will not be passed on to the housewife. The middleman will benefit, or it will be absorbed in extra costs. Therefore, I suspect that the estimate of an increase of ¼ per cent. to ½ per cent. is much too low, and I hope that the Under-Secretary will in due course provide us with a table showing how it is calculated.
A lot of us believe that this policy of the Government has been in preparation for a long time. The last election was fought partly on the issue of food prices, and the Prime Minister pledged to cut them. A lot of people gave him the benefit of the doubt and believed that that was a sincere objective. But I have here a publication of the Conservative Political Centre, entitled "The Farming Future", which was published in January 1970. It deals with the future of food prices and on page 13, under the heading "Eggs", it states:
But the cost of competitive foods like meat and cheese will also be increasing and are likely to lead to compensatory increases in egg prices.
The author of that article was none other than Mr. Joseph Godber. So it appears that the Government were well aware that price increases were coming, particularly in proteins. We have to consider not merely increases in costs, but the impact of those increases on alternative foods.
We know that the prices of tinned food—if we can get the tin—will be increased under this order, due to the tariffs to be imposed upon goods coming in from what have been tariff-free Commonwealth countries. I understand that we import approximately between £50 million and £60 million worth of tinned salmon every year, two-fifths of which is Canadian. A 5 per cent. tariff is to be imposed in

January, amounting to approximately £600,000, rising to 13 per cent. m 1977. I also understand that approximately £15 million worth of corned beef and tinned steak comes from Australia. Either on 1st January or in April, a 5·2 per cent. tariff will be imposed, amounting to £1½ million. Approximately £50 million worth of tinned fruit is imported, and on 1st January tariffs amounting to £1½ million will be imposed, rising to 16 per cent. in 1977, so that approximately £4 million worth of tariffs will go direct to the EEC on 1st January in respect of tinned fish, tinned meat and tinned fruit alone. The Minister must acknowledge that my figures are roughly correct, because they were quoted last Monday in a speech of my hon. Friend the Member for Colne Valley (Mr. David Clark) and were not quarrelled with at that time.
Finally, the right hon. and learned Gentleman produced something of a triumph, to which my right hon. Friend the Member for Jarrow (Mr. Fernyhough) referred—a triumph of reducing the duty on pineapple. As I understand it, Malaysian pineapple was to be charged a tariff of 24 per cent. by 1977. My information is that this has now been reduced to 12 per cent. Therefore, instead of 4·8 per cent. on 1st January we have to pay only 2·4 per cent. This has been put to us tonight as a triumph. If this is being put to us as a triumph, the failure of the Government in their total policy in this respect is abysmal indeed.

9.25 p.m.

Mr. Eric Deakins: This has been a very dry subject to debate. Nothing could be more technical than the subject of import duties. However, it has not been a very dry debate. It has been very emotional, particularly on the vexed question of food prices. It has been emotional also because what we are concerned about is the nation's very lifeblood as a trading nation unlike any other nation.
We have been concerned with the biggest change in duties for 40 years, perhaps the biggest change since the abolition of the corn laws. Mention of the corn laws reminds me that the Liberals have not spoken in this debate. The Liberals are the party of free trade. I hope that, though they have not spoken, the Liberals will be able to support us on this issue in the Lobby tonight.
The debate has been overshadowed by the Chancellor's statement this afternoon. Yet at the same time the debate has been made all the more relevant and urgent as a result of that statement. As Dr. Johnson said—I am sure that this will be known to hon. Members—
Depend upon it, Sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.
This debate has concentrated our minds wonderfully, because the order comes into effect in a fortnight and involves fundamental changes in Britain's pattern of duties and of trade.
A number of hon. Members were unable to catch your eye, Mr. Speaker. I sympathise with them, because I know from experience that many of the best speeches in the House are those which are never made because of shortage of time. Nevertheless, all those who spoke, from both sides, were against the order. I hope that they will forgive me if I do not directly at this stage allude to food prices, which had a very good airing from everyone who spoke.
I want to consider first whether the changes in the order are desirable. There are several areas of concern. The first, which has been alluded to by a number of right hon. and hon. Members, is the effect on Commonwealth countries. Commonwealth countries are to lose part of their preference in our market. Does not this mean a likelihood of our losing the preference we had in their markets? Is that good news for British exporters? Is it desirable to weaken trade links which help bind together the world's only multiracial community outside the United Nations? I think not.
What of the very serious issue of the Asian Commonwealth countries? This was one of the difficult problems during the negotiations, and it was postponed to be dealt with after we had become a member. Then in the Treaty of Accession we had the Joint Declaration of Intent in January 1972. However, so far as the House is aware, discussions are still continuing and have still not been finally resolved to the satisfaction of the countries concerned, as we were promised during the debates on the European Communities Bill last year.
This is an important matter, because an examination of the order and of the duties on a number of sensitive products

for these countries gives cause for worry. I will mention just a few—plywood 5·2 per cent.; footwear 8 per cent.; tinned fruit 6·4 per cent.; tea in small packets 2 per cent.; shellfish, especially prawns—of great interest to Malaysia—8 per cent. All of these products have nil duties at present on entry into this country.
On this issue I have two questions to ask the Minister. Of the first, which is about tobacco, I have already given him notice. The order shows a nil duty on tobacco, but the Common Market in its document on the first stage of implementing the Joint Declaration of Intent, which is dated 24th October, claims that the duty into this country ought to be 10·3 per cent. on tobacco, but for the first year as a special concession it has suggested that the duty should be only 6 per cent.
I do not understand why no duty is shown in the order. There may be a rational explanation, but it is perfectly clear that, whatever it is called, the amount of tax on non-manufactured tobacco from the Asian Commonwealth countries is to be raised, and it will undoubtedly hit tobacco exports, as the tax will hit other exports from those poor countries. Can the Minister assure us that duties will not be imposed on products from Asian Commonwealth countries pending a satisfactory outcome of the discussions on the joint declaration of intent and on an improved generalised scheme of preferences? If the Minister cannot give this assurance, the imposition of the order will definitely harm the trade of those poor countries, and we are completely opposed to that.
There is concern about the generalised scheme of preferences. Evidently the order takes account only of the existing United Kingdom scheme. This is an important matter for Common Market trade relations with poor countries generally, and particularly for the Asian Commonwealth countries. Both the existing Common Market scheme and the possibly improved scheme, discussed in recent months, are based on quotas, which were roundly condemned at the recent United Nations Conference on Trade and Development, held in Santiago. It is stated in a resolution from the conference that the countries should:
provide duty-free and quota-free entry to imports from all developing countries under the generalised system of preferences ".


That motion was accepted by our Government, yet they are now to adopt the generalised preferences scheme as members of the Common Market. This runs completely contrary to the resolution of the conference.
Moreover, the Common Market generalised preferences schemes—both the existing scheme and the improved scheme—are much less generous, as the Minister has admitted, both in the range of agricultural products and in other areas. Is this the time to be contemplating the imposition of harsher trade terms on poor countries? If a new range of duties will be necessary after agreement with the Common Market on an improved generalised preference scheme, why alter our existing system of entry for products from poor countries?
Another area of concern which has not yet been alluded to is that we are now to become entangled with the Community system of reverse preferences with particular countries, associated States. We find these objectionable. They are a form of economic imperialism whereby the reverse preferences are used to create a network of client States, a trading bloc working completely against the principles which the House holds so dear; namely, fostering and furthering multilateral free trade.
The reverse preference is contrary to GATT, but the Government appear to have ignored or forgotten their GATT obligations. GATT is not dead, and it is time the Government did more than pay lip-service to their obligations under GATT. Reverse preferences were also condemned by the Third United Nations Conference on Trade and Development. A resolution from the conference said, among other things:
Developed countries shall… accord trade concessions to all developing countries on a strictly non-reciprocal basis …
There is no doubt that reverse preferences are illegal and immoral. If the Government still support their GATT obligations, why are we making changes in our duties to bring us within the network of trade agreements that run contrary to the letter and spirit of GATT?
Are the changes—irrespective of whether they are necessary—desirable at

present? There has been a lot of reference in the debate to putting taxes on food. We have heard about 8 per cent. tax on mutton and lamb; 6.4 per cent. on tinned fruit; between 5 and 12 per cent. on prepared meats and fish: and 10 per cent. on margarine.

Mr. William Molloy: Is my hon. Friend aware that the Chancellor was speaking to the nation tonight explaining the mess into which he and his colleagues have got things? He said that there would be no harsh taxes to hurt the housewives and so on, but forgot to mention this order, which will do just that. Is this not a form of taxation by deception?

Mr. Deakins: I do not know whether it is deception but it is certainly hypocrisy to say one thing and do another. There is no doubt that any increases in food prices are to be deplored. All speakers have made the same point. They will raise the cost of living at a time when Government policy is to counter inflation. This is surely absurd, particularly when, as we have been told, our Minister of Agriculture is trying to get food levies reduced in Brussels. Here we are putting duties on food.
We want to be able to buy the cheapest food available in world markets. If the Government would try to reform the common agricultural policy in that way they would have the support of the whole House. But they are not trying to do that. What is the advantage to the British people of the new trading pattern towards which we are moving? Great optimism was expressed on this subject by the Labour Government in their White Paper Cmnd. 4289 when they said, among other things, that the balance of payments deficit as a result of entry into the Common Market should be between £125 million and £275 million. This optimism was repeated in the Government's White Paper Cmnd. 4715 when they said:
The Government do not believe that the overall response of British industry to membership can be quantified in terms of its effect upon the balance of trade. They are confident that this effect will be positive and substantial.
Well, at least they got it half right. It has been substantial but entirely negative.
The third piece of optimism, much more recent, came from the right hon. Member


for Argyll (Mr. Noble), the then Minister for Trade, who, speaking in a Common Market debate last year, and dealing with an amendment to Clause 5 of the European Communities Bill, said:
The right hon. Gentleman"—
he was referring to my right hon. Friend the Member for Battersea, North (Mr. Jay)—
said that we are bound to have to accept more imports from the European Community than we can send it exports. That is his personal view. It is not one that is shared by me, and it is certainly not shared by industry."—[OFFICIAL REPORT, 21st June 1972; Vol. 839, c. 525.]
When it comes to economic predictions, perhaps the Government should begin to take lessons from someone like Gipsy Rose Lee.
The fact is that the balance of payments deficit with the Common Market is running at an annual rate of about £1,000 million. Perhaps the Government will blame the weather. Certainly our balance of payments is disastrous, and this order offers no hope whatever of improving it. We have now reached the situation referred to in the Labour Government's White Paper Command 4289 of February 1970 entitled "Britain and the European Communities. An Economic Assessment." These really are words of wisdom. The White Paper said:
we must recognise that if the total burden on our balance of payments as a result of membership became excessive we might find that we were unable to pursue economic policies which enabled the full benefits of membership to be realised.
Are not those words as true today as they were when they were written? Are they not more true? We on the Labour benches recognise that we have obligations in the Treaty of Accession. We have two points to make on this issue.
First, the Common Market itself has changed very little in its attitude on important topics such as reverse preferences, on getting a generous scheme of preferences at least as good as our own—the improved one is not that—and also on getting the agreement with the Asian Commonwealth countries which is satisfactory to those countries. There has been no improvement in any of these directions.
Secondly, everyone would agree that circumstances have changed radically

since the 1971 negotiations. The balance of payments is worse than expected. The first year of membership has been economically disastrous. We are facing an economic crisis involving a fundamental change in economic strategy, and even if it is desirable—which we do not accept—is this the time to kick our traditional trading partners in the teeth?
The call is for sacrifices, so why cannot the Government make a temporary sacrifice of their own Common Market trade policies, which have been so unsuccessful ? We do not expect the Government to renegotiate the Treaty of Accession. We do not ask the Prime Minister to abandon his obsessive delusion that the Common Market can help resolve our economic problems, although he must be one of the increasingly small minority in the country who believe that. We are asking the Government to seek immediate approval from the Common Market to postpone the operation of these duties. Who can doubt that, in similar circumstances, France would have done so? One does not want to be too unkind, but it might be said that France would have acted first and asked permission afterwards.
We are trying to help the Government. They can make use not only of Articles 108 and 109 of the Treaty of Rome but also of Article 135 of the Treaty of Accession. Surely these articles were designed for the very economic circumstances we are facing today, a serious balance of payments crisis.
We were assured during the negotiations and the debates on entry that the Common Market would be sympathetic to any difficulties facing this country as a result of entry. Surely now is the time to ask the other members. In order to help the Government convince the Common Market of the seriousness of our economic situation, and as a first step, as my right hon. Friend said, towards regaining sanity in our economic policy, we ask the House to support the motion.

9.43 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): My first and pleasant task is to congratulate the hon. Member for Wal-thamstow, West (Mr. Deakins) on his first appearance at the Dispatch Box and his maiden speech there. It was delivered in


a forthright and agreeable style, and I hope that we shall hear him many more times from that position. What was less agreeable was the content of what he said.
Although I agree that this has been a lively debate, I think that it has been an unbalanced one. Quite apart from the fact that we would have liked, perhaps, to hear from the Liberals, we would have liked to hear, perhaps, from the right hon. Member for Manchester, Cheetham (Mr. Harold Lever), the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and the hon. Member for Stockton-on-Tees (Mr. William Rodgers)—to name but a few—who take a very different view of the Common Market from that put tonight by those right hon. and hon. Members opposite who have spoken, whose speeches have covered very familiar arguments that we have heard over many years from those who, quite sincerely, oppose the Common Market.
The hon. Member for Walthamstow, West raised the question of tobacco. Although the common customs tariff duty here is protective, the duty on imports into the United Kingdom is a revenue duty which includes a small protective element. The power to vary it is in the Finance Act. A separate order has been made dealing with this, and it was laid on 28th November. On that part of the duty which is protected—that is to say, not revenue—the generalised scheme of preferences will operate. Indian tobacco will not pay the full duty in the United Kingdom. It will be not 10·3 per cent. but about 6 per cent.
The United Kingdom has consistently opposed any obligation on associated developing countries to give reverse preferences. That will continue to be our view. The GSP scheme generally will come into force on 1st January.
I make one observation on the hon. Gentleman's general point about the Commonwealth. He was concerned about the disappearance of our trade with the Commonwealth, or the way in which it might decline. This is nothing new. It has been going on for a long time—long before the Common Market. British companies have been tending to send more of their exports to non-Commonwealth markets for many years.

The question of food prices has obviously dominated much of the debate. A number of specific questions were put to me, many of them by the right hon. Member for Battersea, North (Mr. Jay). I cannot possibly go through a long list of foodstuffs, but I will deal with some of his questions. No duty is being imposed on bananas from the Caribbean. The duty on fish varies. Certain fish will go up in price and some will come down, but fish was not duty-free under the EFTA arrangements. Tea will continue to enter duty-free from the Asian producers.

A number of hon. Members, particularly my hon. Friend the Member for Banbury (Mr. Marten) were concerned about the increase in lamb prices. It is no use baulking at the fact that there will be an increased percentage on lamb. I was not concerned with the matter, but I know that all the anxieties that my hon. Friend has expressed were brought fully into the discussions. If my hon. Friend wants to pursue the matter further, he will no doubt raise it with my right hon. Friend the Minister of Agriculture, Fisheries and Food.

Mr. Molloy: Does the Minister think that it is fair to the House not to answer points because they are another Minister's responsibility? Is not he speaking for the Government in this debate?

Mr. Grant: Yes, Sir. I was merely saying that I did not have time to give a detailed answer on the exact course of the negotiations on lamb. The House will appreciate the position.
We must look at the net effect of the 1st January changes on food prices as a whole and get the whole matter in perspective, which is what the hon. Member for Acton (Mr. Spearing) wanted me to do. The changes in food prices are not likely to be more than ¼ per cent. to½ per cent. That represents about one-tenth of 1 per cent. on the cost of living as a whole. [Interruption.] If the hon. Gentleman, who does not seem to suffer from lack of food himself, wished to challenge those figures, no doubt he would have caught the eye of the Chair.

Mr. Spearing: The Minister has repeated the figure of ¼ per cent. to ½ per cent. I asked him to give the equivalent


in millions of pounds. Will he now do so?

Mr. Grant: I cannot do that at this stage, but I shall gladly do so. That is the best estimate we can give.
The matter must be seen in the perspective of all the other changes. The net effect of duty changes is more likely to be downwards than upwards overall, as my hon. and learned Friend the Minister for Trade and Consumer Affairs said It is misleading to suppose that all duties are going up, as hon. Members sometimes suggest. Duties on food imports from the Six are going down. Duties on food imports from Ireland and Denmark are staying where they are. Some of our external duties are going down.
I regret that my hon. Friend the Member for Banbury has to take the view he has taken. He has been consistent in opposing the Market, but I thought that he might have been prepared to accept that the order was a natural and logical consequence of the decision to enter.

Mr. Marten: May I make one suggestion, which would get the Government out of their dilemma, as I may vote against them, and probably will? If the orders were withdrawn and were then introduced in two batches—one imposing duties, against which we could all vote, and the other reducing them, which we could allow to go through on the nod—the Government would be out of their difficulties.

Mr. Grant: I cannot at this stage succumb to my hon. Friend's blandishments.
The right hon. Member for Battersea, North referred to the complexity of the order, and it is admittedly a formidable-looking document. The complication and the size arise from there being a transitional period. Industry will soon become familiar with the new arrangements. It has adapted remarkably well to other changes this year, as in the past it adapted to the EFTA arrangements, which were by no means simple. My Department and the Customs and Excise will give any help we can in adapting to the new procedure, and we shall make available as much detailed information as we can.
There is one respect in which there is a great need for improvement—that is, in the simplification of trade documents. I accept the complaints that come from United Kingdom traders—particularly small traders, with whom I am concerned—about the number and complexity of documents in intra-Community trade. I assure the House that we are actively engaged, through the Simplification of International Trade Procedure Board, in promoting further simplification, and progress has been made. For example, one single certificate is being instituted for the eight or nine forms originally required, and urgent discussions are taking place with the Commission and our European partners to make progress in this respect.
The right hon. Gentleman mentioned beef and pointed out that the No. 8 Order referred to present rates, which were introduced on 30th April last. The reason for repeating the duties and many others in which there is no change is simply to have a complete consolidated order, but that does not affect the issue.

Mr. Jay: The hon. Gentleman does not deny that there is to be a 4 per cent. tariff on beef, and that that is included in this order.

Mr. Grant: No, I do not. What I say is that the next change in beef and veal duties is due at the beginning of the next beef marketing year, probably 1st April, but this order does not affect that.
I turn now to some of the arguments on the balance of payments advanced by some hon. Members and particularly by the right hon. Member for Stepney (Mr. Shore). It was argued by him, as it was argued by the hon. Member for Ebbw Vale (Mr. Michael Foot), elsewhere, that the current world economic and energy problems demanded that we should retain a greater degree of tariff autonomy over import duties. That is purely a short-term argument. The short-term effect of these changes is far less significant than the sort of measures for demand management that my right hon. Friend the Chancellor of the Exchequer announced today.
In the long term, the abolition of internal duties is bound to improve trade within the Community, and this must be the more important judgment in the long


run. What would be wholly disastrous would be a return to the sort of narrow isolationism and protectionism that characterised the period between the wars. Let us not forget that tariff autonomy is forfeited not only by Britain, but by eight other countries trading within the Community.
I remind the House of something said some time ago and of which we should be aware:
… the long-term potential for Europe, and therefore for Britain, of the creation of a single market of approaching 300 million people, with all the scope and incentive which this will provide for British industry …
That was the right hon. Gentleman the Leader of the Opposition in his White Paper. That was the fundamental argument advanced by the Labour Government in support of their application for membership in 1967. Notwithstanding the short-term difficulties, it is as true today as it was in 1967.
The changes in duty provided by the order are fundamental to the enlarged EEC and flow inevitably from our decision to enter the EEC, the whole concept of which was the abolition of internal tariffs and the creation of a common external tariff. The terms of entry which were negotiated embody transitional arrangements, of which this order is another logical step. Those terms of entry were accepted by the House with a majority of 112. They would have been acceptable to the previous Labour Government, if they had the honesty to say so.

If the order were annulled it would be a rejection of the whole concept of the Common Market as a customs union of the Nine. It would be inconsistent with the first step which flowed from the decision to enter, namely, the cut of 20 per cent. on industrial duty on 1st April 1973, which has gone through the House. Industry has made its long-term plans on the basis that duties would be totally abolished within the Nine by 1977 by stages, of which this order is one.

The order also maintains duty-free trade with Ireland and Denmark, and very largely with the EFTA countries. Rejection of the order would throw into total disarray the whole of industry and our principal trading partners. The motion is at best a thinly-veiled attempt to renegotiate the terms of entry, which the wiser members of the Opposition know is utterly impracticable, and at worst an attempt by half the Opposition to take us out of Europe, which is absurd.

The order is exactly in line with what would have been acceptable to the previous Labour Government. The Opposition know that they cannot renegotiate the terms and that they would not renegotiate the terms. I confidently advise the House to reject the motion for the humbug that it is.

Question put:—

The House divided: Ayes 278, Noes 294.

Division No. 24.]
AYES
[9.57 p.m.


Abse, Leo
Bradley, Tom
Davidson, Arthur


Albu, Austen
Brown, Robert C.(N'c'tle-u-Tyne, W.)
Davies, Denzil (Llanelly)


Allaun, Frank (Salford, E.)
Brown, Hugh D. (G'gow, Provan)
Davies, G. Elfed (Rhondda, E.)


Archer, Peter (Rowley Regis)
Brown, Ronald (Shoreditch & F'bury)
Davies, lfor (Gower)


Armstrong, Ernest
Buchan, Norman
Davis, Clinton (Hackney, C.)


Ashley, Jack
Butler, Mrs. Joyce (Wood Green)
Davis, Terry (Bromsgrove)


Ashton, Joe
Callaghan, Rt. Hn. James
Deakins, Eric


Atkinson, Norman
Campbell, I. (Dunbartonshire, W.)
de Freitas, Rt. Hn. Sir Geoffrey


Bagier, Gordon A. T.
Cant, R. B.
Delargy, Hugh


Barnes, Michael
Carmichael, Neil
Dell, Rt. Hn. Edmund


Barnett, Guy (Greenwich)
Carter, Ray (Birmingh'm, Northfield)
Dempsey, James


Barnett, Joel (Heywood and Royton)
Carter-Jones, Lewis (Eccles)
Doig, Peter


Baxter, William
Castle, Rt. Hn. Barbara
Douglas, Dick (Stirlingshire, E.)


Beaney, Alan
Clark, David (Colne Valley)
Douglas-Mann, Bruce


Bell, Ronald
Cocks, Michael (Bristol, S.)
Driberg, Tom


Benn, Rt. Hn. Anthony Wedgwood
Coleman, Donald
Duffy, A. E. P.


Bennett, James (Glasgow, Bridgeton)
Concannon, J. D.
Dunn, James A.


Bidwell, Sydney
Conlan, Bernard
Dunnett, Jack


Biffen, John
Corbet, Mrs. Freda
Eadie, Alex


Bishop, E. S.
Cox, Thomas (Wandsworth, C.)
Edeman, Maurice


Blenkinsop, Arthur
Crawshaw, Richard
Edwards, Robert (Bilston)


Boardman, H. (Leigh)
Cronin, John
Edwards, William (Merioneth)


Body, Richard
Crosland, Rt. Hn. Anthony
Ellis, Tom


Booth, Albert
Cunningham, G. (Islington, S. W.)
English, Michael


Boothroyd, Miss Betty
Cunningham, Dr. J. A. (Whitehaven)
Evans, Fred


Bottomley, Rt. Hn. Arthur
Dalyell, Tam
Ewing, Harry


Boyden, James (Bishop Auckland)
Darling, Rt. Hn. George
Faulds, Andrew




Fernyhough, Rt. Hn. E.
Lestor, Miss Joan
Probert, Arthur


Fisher, Mrs. Doris (B'ham, Ladywood)
Lever, Rt. Hn. Harold
Radice, Giles


Fitch, Alan (Wigan)
Lewis, Arthur (W. Ham, N.)
Reed, D. (Sedgefield)


Fletcher, Ted (Darlington)
Lewis, Ron (Carlisle)
Rees, Merlyn (Leeds, S.)


Foot, Michael
Lipton, Marcus
Rhodes, Geoffrey


Ford, Ben
Lomas, Kenneth
Richard, Ivor


Forrester, John
Loughlin, Charles
Roberts, Albert (Normanton)


Fraser, Rt. Hn. Hugh (St'fford & Stone)
Lyon, Alexander W. (York)
Roberts, Rt. Hn. Goronwy (Caernarvon)


Galpern, Sir Myer
Lyons, Edward (Bradford, E.)
Robertson, John (Paisley)


Garrett, W. E.
McBride, Neil
Roderick, Caerwyn E. (Brc'n&R'dnor)


Gilbert, Dr. John
McCartney, Hugh
Rodgers, William (Stockton-on-Tees)


Ginsburg, David (Dewsbury)
McElhone, Frank
Roper, John


Golding, John
McGuire, Michael
Rose, Paul B.


Gordon Walker, Rt. Hn. P. C.
Machin, George
Ross, Rt. Hn. William (Kilmarnock)


Gourlay, Harry
Mackenzie, Gregor
Rowlands, Ted


Grant, George (Morpeth)
Mackie, John
Sandelson, Neville


Grant, John D. (Islington, E.)
Mackintosh, John P.
Sheldon, Robert (Ashton-under-Lyne)


Griffiths, Eddie (Brightside)
Maclennan, Robert
Shore, Rt. Hn. Peter (Stepney)


Hamilton, James (Bothwell)
McMaster, Stanley
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Hamilton, William (Fife, W.)
McMillan, Tom (Glasgow, C.)
Short, Mrs. Renée (W'hampton, N.E.)


Hamling, William
McNamara, J. Kevin
Silkin, Rt. Hn. John (Deptford)


Hannan, William (G'gow, Maryhill)
Mallalieu, J. P. W. (Huddersfield, E.)
Silkin, Hn. S. C. (Dulwich)


Hardy, Peter
Marks, Kenneth
Sillars, James


Harrison, Walter (Wakefield)
Marquand, David
Silverman, Julius


Hart, Rt. Hn. Judith
Marsden, F.
Skinner, Dennis


Hattersley, Roy
Marshall, Dr. Edmund
Small, William


Hatton, F.
Marten, Neil
Smith, John (Lanarkshire, N.)


Healey, Rt. Hn. Denis
Mason, Rt. Hn. Roy
Spearing, Nigel


Heffer, Eric S.
Mayhew, Christopher
Stallard, A. W.


Hilton, W. S.
Meacher, Michael
Stewart, Rt. Hn. Michael (Fulham)


Hooson, Emlyn
Mellish, Rt. Hn. Robert
Stoddart, David (Swindon)


Horam, John
Mikardo, Ian
Stonehouse, Rt. Hn. John


Houghton, Rt. Hn. Douglas
Millan, Bruce
Stott, Roger


Howell, Denis (Small Heath)
Miller, Dr. M. S.
Strang, Gavin


Huckfield, Leslie
Milne, Edward
Strauss, Rt. Hn. G. R.


Hughes, Rt. Hn. Cledwyn (Anglesey)
Mitchell, R. C. (S'hampton, Itchen)
Summerskill, Hn. Dr. Shirley


Hughes, Mark (Durham)
Moate, Roger
Swain, Thomas


Hughes, Robert (Aberdeen, N.)
Molloy, William
Thomas, Rt. Hn. George (Cardiff, W.)


Hughes, Roy (Newport)
Molyneaux, James
Tinn, James


Hunter, Adam
Morgan, Elystan (Cardiganshire)
Torney, Tom


Hutchison, Michael Clark
Morris, Alfred (Wythenshawe)
Tuck, Raphael


Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Morris, Rt. Hn. John (Aberavon)
Turton, Rt. Hn. Sir Robin


Janner, Greville
Moyle, Roland
Varley, Eric G.


Jay, Rt. Hn. Douglas
Mulley, Rt. Hn. Frederick
Wainwright, Edwin


Jeger, Mrs. Lena
Murray, Ronald King
Waiden, Brian (B'm'ham, All Saints)


Jenkins, Hugh (Putney)
Oakes, Gordon
Walker, Harold (Doncaster)


Jenkins, Rt. Hn. Roy (Stechford)
Ogden, Eric
Wallace, George


John, Brynmor
O'Halloran, Michael
Watkins, David


Johnson, Carol (Lewisham, S.)
O'Malley, Brian
Weltzman, David


Johnson, James (K'ston-on-Hull, W.)
Oram, Bert
Wellbeloved, James


Johnson, Waller (Derby, S.)
Orbach, Maurice
Wells, William (Walsall, N.)


Jones, Barry (Flint, E.)
Orme, Stanley
White, James (Glasgow, Pollok)


Jones, Dan (Burnley)
Oswald, Thomas
Whitehead, Phillip


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Owen, Dr. David (Plymouth, Sutton)
Whitlock, William


Jones, Gwynoro (Carmarthen)
Padley, Walter
Willey, Rt. Hn. Frederick


Jones, T. Alec (Rhondda, W.)
Paget, R. T.
Williams, Alan (Swansea, W.)


Judd, Frank
Palmer, Arthur
Williams, Mrs. Shirley (Hitchin)


Kaufman, Gerald
Pannell, Rt. Hn. Charles
Williams, W. T. (Warrington)


Kelly, Richard
Parker, John (Dagenham)
Wilson, Alexander (Hamilton)


Kerr, Russell
Pavltt, Laurie
Wilson, Rt. Hn. Harold (Huyton)


Kinnock, Neil
Peart, Rt. Hn. Fred
Wilson, William (Coventry, S.)


Lambie, David
Pendry, Tom
Woof, Robert


Lamborn, Harry
Perry, Ernest G.



Lamond, James
Powell, Rt. Hn. J. Enoch
TELLERS FOR THE AYES:


Latham, Arthur
Prentice, Rt. Hn. Reg.
Mr. J. D. Dormand and


Lawson, George
Price, William (Rugby)
Joseph Harper.


Leadbitter, Ted




Lee, Rt. Hn. Frederick




Leonard, Dick







NOES



Adley, Robert
Barber, Rt. Hn. Anthony
Bowden, Andrew


Alison, Michael (Barkston Ash)
Batsford, Brian
Braine, Sir Bernard


Allason, James (Hemel Hempstead)
Beamish, Col. Sir Tufton
Bray, Ronald


Amery, Rt. Hn. Julian
Beith, A. J.
Brewis, John


Archer, Jeffrey (Louth)
Bennett, Dr. Reginald (Gosport)
Brinton, Sir Tatton


Astor, John
Benyon, W.
Brocklebank-Fowler, Christopher


Atkins, Humphrey
Berry, Hn. Anthony
Brown, Sir Edward (Bath)


Austick, David
Biggs-Davison, John
Bruce-Gardyne, J.


Awdry, Daniel
Blaker, Peter
Bryan, Sir Paul


Baker, Kenneth (St. Marylebone)
Boardman, Tom (Leicester, S. W.)
Buchanan-Smith, Alick (Angus, N&M)


Baker, W. H. K. (Banff)
Boscawen, Hn. Robert
Buck, Antony


Balniel, Rt. Hn. Lord
Bossom, Sir Clive
Bullus, Sir Eric







Burden, F. A.
Heath, Rt. Hn. Edward
Peel, Sir John


Butler, Adam (Bosworth)
Heseltine, Michael
Percival, lan


Campbell, Rt. Hn. G. (Moray & Nairn)
Hicks, Robert
Peyton, Rt. Hn. John


Carlisle, Mark
Higgins, Terence L.
Pike, Miss Mervyn


Carr, Rt. Hn. Robert
Hiley, Joseph
Pink, R. Bonner


Channon, Paul
Hill, John E. B. (Norfolk, S.)
Pounder, Rafton


Chapman, Sydney
Hill, S. James A. (Southampton, Test)
Price, David (Eastleigh)


Chataway, Rt. Hn. Christopher
Holland, Philip
Prior, Rt. Hn. J. M. L.


Chichester-Clark, R.
Holt, Miss Mary
Proudfoot, Wilfred


Churchill, W. S.
Hornby, Richard
Quennell, Miss J. M.


Clark, William (Surrey, E.)
Hornsby-Smith. Rt. Hn. Dame Patricia
Raison, Timothy


Clarke, Kenneth (Rushcliffe)
Howe, Rt. Hn. Sir Geoffrey (Reigate)
Ramsden, Rt. Hn. James


Cockeram Eric
Howell, David (Guildford)
Rawlinson, Rt. Hn. Sir Peter


Cooke, Robert
Howell, Ralph (Norfolk, N.)
Redmond, Robert


Coombs, Derek
Hunt, John
Reed, Laurance (Bolton, E.)


Cooper, A. E.
Iremonger, T. L.
Rees, Peter (Dover)


Cordle, John
Irvine, Bryant Godman (Rye)



Corfileld, Rt. Hn. Sir Frederick
James, David
Rees-Davies, W. R.


Cormack, Patrick
Jenkin, Rt. Hn. Patrick (Woodford)
Renton, Rt. Hn. Sir David


Costain, A. P.
Johnson Smith G. (E. Grinstead)
Rhys Williams, Sir Brandon


Critchley, Julian
Jones, Arthur (Northants, S.)
Ridley, Hn. Nicholas


Crouch, David
Jopling, Michael
Ridsdale, Julian


Crowder, F. P.
Joseph, Rt. Hn. Sir Keith
Rippon, Rt. Hn. Geoffrey


Davies, Rt. Hn. John (Knutsford)
Kaberry, Sir Donald
Roberts, Wyn (Conway)


d'Avigdor-Goldsmid, Sir Henry
Kellett-Bowman, Mrs. Elaine
Rodgers, Sir John (Sevenoaks)


d'Avigdor-Goldsmid, Maj.-Gen. Jack
Kershaw, Anthony
Rossi, Hugh (Hornsey)


Dean, Paul
Kimball, Marcus
Rost, Peter


Deedes, Rt. Hn. W. F.
King, Evelyn (Dorset, S.)
Royle, Anthony


Digby, Simon Wingfield
King, Tom (Bridgwater)
Russell, Sir Ronald


Dixon, Piers
Kinsey, J. R.
St. John-Stevas, Norman


Dodds-Parker, Sir Douglas
Kitson, Timothy
Sainsbury, Timothy


Drayson, Burnaby
Knight, Mrs. Jill
Sandys, Rt. Hn. D.


du Cann, Rt. Hn. Edward
Knox, David
Scott, Nicholas


Dykes, Hugh
Lamont, Norman
Scott-Hopkins, James


Edwards, Nicholas (Pembroke)
Lane, David
Shaw, Michael (Sc'b'gh & Whitby)


Elliott, Capt. Walter (Charshalton)
Langford-Holt, Sir John
Shelton, William (Clapham)


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Le Marchant, Spencer
Shersby, Michael


Emery, Peter
Lewis, Kenneth (Rutland)
Simeons, Charles


Eyre, Reginald
Lloyd, lan (P'tsm'th, Langstone)
Sinclair, Sir George


Fenner, Mrs. Peggy
Longden, Sir Gilbert
Skeet, T. H. H.


Fidler, Michael
Loveridge, John
Smith, Cyril (Rochdale)


Finsberg, Geoffrey (Hampstead)
Luce, R. N.
Smith, Dudley (W'wick & L'mington)


Fisher, Nigel (Surbiton)
McAdden, Sir Stephen
Soref, Harold


Fletcher, Alexander (Edinburgh, N.)
MacArthur, Ian
Speed, Keith


Fletcher-Cooke, Charles
McCrindle, R. A.
Spence, John


Fookes, Miss Janet
McLaren, Martin
Sproat, lain


Fortescue, Tim
Maclean, Sir Fitzroy
Stainton, Keith


Foster, Sir John
Macmillan, Rt. Hn. Maurice (Farnham)
Stanbrook, Ivor


Fowler, Norman
McNair-Wilson, Michael
Steel, David


Fox, Marcus
McNair-Wilson, Patrick (New Forest)
Stewart-Smith, Geoffrey (Belper)


Freud, Clement
Madel, David
Stodart, Anthony (Edinburgh, W.)


Fry. Peter
Maginnis, John E.
Stokes, John


Galbraith, Hn. T. G. D.
Marples, Rt. Hn. Ernest
Stuttaford, Dr. Tom


Gardner, Edward
Mather, Carol
Sutcliffe, John


Gibson-Watt, David
Maude, Angus
Tapsell, Peter


Gilmour, Ian (Norfolk, C.)
Maudling, Rt. Hn. Reginald
Taylor, Sir Charles (Eastbourne)


Gilmour, Sir John (Fife, E.)
Mawby, Ray
Taylor, Edward M. (G'gow, Cathcart)


Glyn, Dr. Alan
Maxwell-Hyslop, R. J.
Taylor, Robert (Croydon, N. W.)


Godber, Rt. Hn. J. B.
Meyer, Sir Anthony
Tebbit, Norman


Goodhart, Philip
Mills, Peter (Torrington)
Temple, John M.


Goodhew, Victor
Miscampbell, Norman
Thatcher, Rt. Hn. Mrs. Margaret


Gorst, John
Mitchell, Lt. -Col. C. (Aberdeenshire, W)
Thomas, John Stradling (Monmouth)


Gower, Raymond
Mitchell, David (Basingstoke)
Thomas, Rt. Hn. Peter (Hendon, S.)


Grant, Anthony (Harrow, C.)
Money, Ernie
Thompson, Sir Richard (Croydon, S.)


Gray, Hamish

Tilney, Sir John


Green, Alan
Monks, Mrs. Connie
Tope, Graham


Grieve, Percy
Monro, Hector
Trafford, Dr. Anthony


Griffiths, Eldon (Bury St. Edmunds)
Montgomery, Fergus
Trew, Peter


Grimond, Rt. Hn. J.
More, Jasper
Tugendhat, Christopher


Grylls, Michael
Morgan-Giles, Rear-Adm.



Gumner, J. Selwyn
Morrison, Charles
van Straubenzee, W. R.


Gurden, Harold
Mudd, David
Vaughan, Dr. Gerard


Hall, Miss Joan (Keighley)
Neave, Airey
Waddington, David


Hall Sir John (Wycombe)
Nicholls, Sir Harmar
Walder, David (Clitheroe)


Hall-Davis, A. G. F.
Noble, Rt. Hn. Michael
Walker, Rt. Hn. Peter (Worcester)


Hamilton, Michael (Salisbury)
Normanton, Tom
Walker-Smith, Rt. Hn. Sir Derek




Wall, Patrick


Hannam, John (Exeter)
Nott, John
Walters, Dennis


Harrison, Brian (Maldon)
Onslow, Cranley
Ward, Dame Irene


Harrison, Col. Sir Harwood (Eye)
Oppenheim, Mrs. Sally
Weatherill, Bernard


Harvie Anderson, Miss
Osborn, John
Wells, John (Maidstone)


Haselhurst, Alan
Owen, Idris (Stockport, N.)
White, Roger (Gravesend)


Hastings, Stephen
Page, Rt. Hn. Graham (Crosby)
Whitelaw, Rt. Hn. William


Havers, Sir Michael
Pardoe, John
Wiggin, Jerry


Hayhoe, Barney
Parkinson, Cecil
Wilkinson, John







Winterton, Nicholas
Woodnutt, Mark
TELLERS FOR THE NOES:


Wolrige-Gordon, Patrick
Worsley, Marcus
Mr. Walter Clegg and


Wood, Rt. Hn. Richard
Wylle, Rt. Hn. N. R.
Mr. Paul Hawkins.


Woodhouse, Hn. Christopher
Younger, Hn. George

Question accordingly negatived.

EUROPEAN COMMUNITIES (TREATIES)

10.13 p.m.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Royle): I beg to move,
That the European Communities (Definition of Treaties) (No. 2) Order 1973, a draft of which was laid before this House on 3rd December, be approved.
This is the third time that such an order has been laid before the House by me. The schedule to the draft order lists each of the treaties to be specified. The texts of all are available to the House either as Command Papers or in the Official Journal of the European Communities.
The first treaty listed, a decision of the member States of the ECSC, provides for the opening of tariff preferences for products covered by the ECSC and originating in Norway. The exchanges of letters with Norwegian and Finnish representatives, shown as items 2 and 7 of the schedule, are ancillary to the main European Community agreements with those countries and concern the opening of duty-free quotas for imports of paper products over the period 1974–83 inclusive.
Items Nos. 3 and 4, both agreements with the Lebanon, are interrelated. The first, a protocol of 16th May 1973, provides for the United Kingdom, Ireland and Denmark to become contracting parties to an earlier agreement on trade and technical co-operation between the EEC, and the original six member States, and the Lebanon. The second, which is in the form of an exchange of letters, renews that earlier agreement until 30th June 1974.
The making of this Order in Council will enable the United Kingdom to give notification that the necessary national procedures have been completed. Neither treaty can enter into force until all the parties have given such notification.
The provisional location of the European Monetary Co-operation Fund in Luxembourg is dealt with in item No. 5 of the schedule. The parent instrument establishing the European Monetary Cooperation Fund is Council Regulation

No. 907/73. But because decisions on the seat of Community institutions are, by virtue of Article 216 of the EEC Treaty, to be adopted by common accord of the member States, the question of the location of the fund could not be dealt with by the regulation. No other aspect of the fund's establishment or operation is affected by decision now specified.
Lastly the schedule includes, at item 6, the ECSC agreement with Finland, concluded at the same time as the main agreement between that country and the EEC. The ECSC agreement, unlike the main EEC agreement, was signed by the member States as well as by the ECSC, and thus under Section 1(3) of the European Communities Act this Order in Council is required to give the agreement the status of a "Community treaty".
My few remarks have been immensely complicated. They were not meant to be so. I hope I have explained to the House the details of this small order. It is an important order. It is the third one which I have introduced.
The draft order follows the precedents set in December 1972 and July last and is in conformity with the terms of Section 1(3) of the Act. There is no doubt that all seven items listed in the schedule are new treaties within the scope of the section.

10.18 p.m.

Mr. Peter Shore: The House will be grateful to the Minister for his admirably brief and lucid exposition of the seven treaties which are dealt with in the order. They are the seven treaties named in the schedule. The Government—and, I am sure, the Minister—will be glad to acknowledge a duty to explain to the House the significance and the justification of these treaties, even those which are of a relatively minor status.
Equally the House has a duty to be vigilant when treaties are being signed and new agreements entered into between the Community and other countries. Before turning to some of the matters which are covered by the treaties, I shall risk one reflection. There is what I have come to feel to be a great anomaly. We have the opportunity, because of the contents of


Section 1 of the Act, to debate and, in the last resort, to vote against certain treaties. While these are not matters of no importance, the House will recognise that these seven treaties are matters of lesser importance rather than of first importance.
Earlier today we debated the subject of trade between this country and the Third World—that is, the trade of this country as it will be changed by adopting the Generalised Preference Scheme of the enlarged EEC—yet no opportunity or procedure is available to enable us to discuss this major matter which affects the whole relationship of this country with a great part of the developing world.
Although we may hope in time to find procedures which might partially mitigate the effects of this kind of self-enacting Community legislation, I can only say how much I regret that provision was not made in the European Communities Act, at the time when it was being hammered out and fashioned, for the House to consider important matters—which is undoubtedly what the future Generalised Preference Scheme of the enlarged Community is—as well as what appear to be, so far at any rate, the minor matters covered in these definition treaty orders.
Turning to the assortment of treaties listed in the schedule, I propose to select one or two for further questioning or comment. One that stands out from the seven as being, as it were, on its own is the treaty which agrees to the location of the European Monetary Co-operation Fund in Luxembourg. Hon. Members will recall the gallant and protracted effort by the Secretary of State for Foreign and Commonwealth Affairs to have that fund located in some other part of Europe. Indeed, it must have occurred to the right hon. Gentleman and to some of the Community Ministers too that it was just conceivable that the headquarters of a monetary fund dealing on behalf of the Community with intervention in markets, questions of reserve currency matters generally, and so on, might be located in London, which could be considered as having some advantages compared with Luxembourg. But that is not to be. As we know, it is to be

located in the Grand Duchy of Luxembourg.
I think that there are practical problems about this proposal. I am not sure whether the authorities have enough telephone lines to be constantly in operation if such a fund ever becomes really active in terms of monetary intervention in world markets. I am not sure whether air transport from this country and from other parts of Europe to the Duchy of Luxembourg is as good as it is to some other cities. [Interruption.] The hon. Gentleman need not become quite so touchy.

Mr. J. Selwyn Gummer: Mr. J. Selwyn Gummer (Lewisham, West) rose—

Mr. Shore: No.

Mr. Gummer: As the right hon. Gentleman—

Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. As the right hon. Member who has the Floor is not giving way, the hon. Member must resume his seat.

Mr. Shore: I must not for a moment allow myself any possibility of humour in the presence of the hon. Member for Lewisham, West (Mr. Selwyn Gummer).
There is a reference in the schedule to the provisional location of the fund. Does "provisional" mean that this decision will come up again for consideration in the foreseeable future, or has this been decided for all reasonable time in the future?
That apart, the substantial treaties, the treaties between the Community and the countries outside, number six. As I understand it, two deal with Norway, two with Finland and two with Lebanon. The Lebanon treaty raises no questions of great interest. It is a small amount of trade which is involved. It is simply the application of an existing trade and technical co-operation agreement. Regarding Norway and Finland, I note that in the case of the paper products—this applies to Norway and Finland—there is to be a duty-free quota for the years 1974 to 1983. Does this relate to the transitional period which those countries have negotiated with the EEC? Does it mean that at the end of the period, in


1983, there would be a nil tariff anyway between those countries and the Community? Is that the significance of the period 1974–83 in which these duty-free quotas are to be in force? Will there, after that, be no tariffs from the EEC in relation to those countries and, therefore, no longer any reason for a tariff-free quota?
On the ECSC arrangement, which again affects both Norway and Finland, is it the case that no trade in iron and steel products which were previously free of tariff between Britain and Norway and Finland—Norway as a member of EFTA and Finland as an associate member—is to be brought back into tariff as a result of these treaties with the enlarged Community? I think we would all agree that it would be a very retrograde step if any tariff was imposed on goods traded between Britain, Finland and Norway when we had successfully got rid of those tariffs under the EFTA arrangements many years ago.
I hope that the Under-Secretary will give reassurance on these questions. If that is given, the Opposition will feel that they have nothing to do but simply to take note of these treaties.

10.27 p.m.

Colonel Sir Tufton Beamish: The Opposition do not look very much as though they are in a dividing mood, in spite of what the right hon. Member for Stepney (Mr. Shore) has said. I have listened with considerable surprise and astonishment to what he has had to say. I cannot help remembering that he was a leading member of the previous Labour administration, which applied to join the Common Market and which accepted in toto the common commercial policy. The right hon. Gentleman did not think that that was a resigning matter. He thought it entirely proper to remain a member of that Government and to continue to draw a fat salary, because he recognised that the common commercial policy of the European Community was part and parcel of the Community's apparatus. I find it astonishing, therefore, that the right hon. Gentleman should make this sort of protest tonight.
I am equally surprised that the right hon. Gentleman should describe these treaties between the Community and Norway, Finland and the Lebanon as

relatively minor. They are not relatively minor at all; they are very important. The first trade agreement that the Community made with any Arab country was the commercial agreement into which it entered with the Lebanon, which has recently been renewed, as the right hon. Gentleman said. This is a significant and important treaty, which is highly valued in the Lebanon.
It cannot have come as a surprise to anyone in the House that that treaty has been renewed. It is part of the common commercial policy of the Community, which has commercial treaties now with all the countries that border the Mediterranean, I think with the exception of only one, and that is Libya. I have no doubt that the right hon. Gentleman, with all his experience, has been following these matters very closely indeed and must have studied them when he was a leading member of the administration which applied to join the Community and accepted the common commercial policy.
As for Norway and Finland, it was clear when the Labour Government applied to join that we should have to accept the common commercial policy towards those EFTA countries which either did not wish to join or which, for one reason or another, did not join the Community. This applies slightly differently to Norway and Finland. Norway, of course, applied to join, and when it did not join we had to enter into trade relations with her through the Community under the common commercial policy. For many months the question of Finland has been in limbo, in the deep freeze, so to speak, because there was doubt about ratification there. The right hon. Gentleman and the Labour Party had ample opportunity to study this treaty and to raise any aspect of it that they wished.
I do not want it to be thought that I am not in favour of a system of national Parliaments scrutinising, filtering and influencing Community legislation of all kinds, including the entering into of treaty arrangements. I am entirely in favour of that. We have before us and will be debating after the recess the recommendations of the Foster Committee, which have a lot to be said for them—although I do not go along with them all the way. I could not agree more


with the Labour Party and some of my hon. Friends that we should have ample opportunity to scrutinise and influence these things.
We already have some opportunities to do so and they are not insubstantial. I am myself a member of the External Economic Relations Committee of the European Parliament. I shall be leaving on Wednesday evening—if the Labour Party will give me a pair, instead of making things so difficult for me—to discuss trading agreements with other countries. I am in close touch with the Department of Trade and Industry and I get a good brief from it. I am seeking to influence these things in British interests by taking full account of the interests of the Community as a whole.
Les absents ont toujours torts. Why is the right hon. Gentleman making this protest from the Front Bench, with apparently no support behind him, instead of sending a delegation to the European Parliament? Why is the Labour Party skulking on the sidelines? It is ridiculous to see a right hon. Gentleman who was a leading member of the Labour administration that applied to join the Community and accepted without question—we have only to read their White Paper for confirmation of this—the common commercial policy, making this sort of feeble protest about trading agreements which had to be made with Finland and Norway, as EFTA countries or associated countries which did not join, and about the renewal of the trade and technical agreement with the Lebanon, which has existed for 10 years. It is pathetic to listen to that sort of speech when the right hon. Gentleman has so little support behind him.

10.33 p.m.

Mr. Edward Milne: I am sorry that the right hon. and gallant Member for Lewes (Sir T. Beamish), who is a member of the European Parliament—

Mr. Eric Deakins: Assembly.

Mr. Milne: It does not matter what name it is given, because its importance is not heightened by its title.
I am sorry that, with his experience in that Assembly, the right hon. and gallant Gentleman did not use this opportunity to

give us some information about the order. He dealt a good deal with the activities of my right hon. Friend the Member for Stepney (Mr. Shore) and the decisions of the Labour Government in 1967, but three factors in the order need consideration.
One point came out clearly in the right hon. and gallant Gentleman's speech—the fact that we in this Parliament and the British people have no control over the decisions taken about this order or about anything else which has flowed or will flow from the European Communities Act 1972. What is important is that the countries mentioned in the schedule to the order—the Lebanon, Norway and Finland—have an advantage over the member countries of the Community because, unlike ourselves their Parliaments can determine what action will be taken in relation to agreements. This is a very important factor to remember when we are dealing with matters of this kind.
We are grateful to the right hon. and gallant Member for Lewes for reminding us that as a result of our having gone through the Lobbies in October 1971 matters such as regional development, the question of the North-East and so on cannot be decided by the representatives of those areas in this assembly and will be determined by the European bodies responsible for them. Does the right hon. and gallant Member want me to give way?

Sir T. Beamish: The hon. Gentleman is very kind indeed in promoting me to the Privy Council, of which I am certainly not a member. But will he bear in mind, when he says that we decided in principle in October 1971 that we should join the Community, that there was another vote in Parliament when a majority of well over 400 voted for the principle of joining the European Economic Community, based on the Labour Party's White Paper, which accepted absolutely the common agricultural policy?

Mr. Milne: I do not need to be reminded of that vote, because I was one of the 62 persons who voted against it. But that does not alter the fact that regional policy matters cannot be determined by the representatives in Parliament. As has already been said, the


attendance in the House is certainly very thin—

Mr. S. James A. Hill: The hon. Gentleman will be aware that, in the new regional policy committee that is to be set up, the national member States will still have their own regional policy programmes. The new regional policy committee will be only a supporting fund and will in no way deter the Government here from helping the North-East or any other part of the United Kingdom.

Mr. Milne: The hon. Gentleman has mentioned the regional policies which are determined by successive Governments in this country. But there is no guarantee that the member countries will be free to operate regional policies as they have done in the past. Indeed, there is ample evidence in the lifetime of the Community that various countries have had restrictions placed upon their regional development policies. There was intervention by the Community in the case of Belgium and Italy, and the possibility of the spread of Fascism to southern Italy is at the moment being used as an argument against increased aid.
I want to come back to the order itself—[HON. MEMBERS: "Hear, hear."] It is all right for right hon. and hon. Members to say "Hear, hear." Those who intervene should not complain if they are answered. That is the purpose of intervention.
The kernel of the order and the lesson that emerges crystal clear from it is that the countries outside the Community and which are mentioned in the order have a greater degree of freedom in determining the decisions taken and explained within the order and the White Papers on the operations, whether concerning paper, coal and steel or anything else, than Britain has at present, because we wrote away such freedom when we went into the Division Lobbies and decided to join the Community.

10.41 p.m.

Sir Brandon Rhys Williams: The right hon. Member for Stepney (Mr. Shore) knows that I hear a number of his speeches on the question of European affairs and that I always listen to them with the greatest

interest. However, I have detected a falling away, which I think perhaps he has not, in the quality of his speeches lately, because he seems to be coming increasingly out of touch.
The Labour Party as a whole is seen by Socialist Parties on the Continent, and certainly is seen by Conservative Members in the House, to be increasingly ill-informed, provincial and obsolete on European questions. I have a feeling that this is something to do with the absence of Labour Members from the European Parliament, where they would be able to have first-hand experience of the things they are trying to talk about in the House.
The right hon. Gentleman spoke about Luxembourg as though he had perhaps visited it, but I had the feeling that he never had, because, if he had, he might not have said the rather injudicious things he said about the telephone service there. He might have realised also that Luxembourg is becoming a banking centre. Perhaps he is not aware that it is the headquarters of the European Investment Bank which has just made an extremely important investment in South Wales, of which I am very glad.
The European Fund for Monetary Cooperation will, I hope, be established in Luxembourg as soon as may be, because I do not think that it is an entirely happy arrangement that it exists only in a back room in Basle. I hope that this will become an important institution and that it will be of great service to this country. I hope that the right hon. Gentleman will try to become better informed about the debates that have gone on about this subject and that he will not, for instance, accuse my right hon. Friend the Foreign Secretary of having fought against the location of the bank in Luxembourg.
One consideration which I should like to put to the right hon. Gentleman is this. Of all the different capitals of the Community, Luxembourg is the least active politically and, therefore, perhaps the most suitable for a bank, which cannot afford to be knocked around by politicians with whom the right hon. Gentleman might not agree.
I was amazed to hear the right hon. Gentleman's suggestion, which I might have supported but I do not think


many of his supporters on the crowded Labour benches would have liked, that the European Fund should be situated in London. We remember the Labour Party's traditional opposition to the City of London and its intense suspicion of the City's institutions, which earn so much in foreign exchange but so much discredit on the Labour benches.
It is perhaps rather remarkable that a right hon. Gentleman, who is a member of the Labour Party, which nationalised the Bank of England because it did not believe that institutions in London should be free from Government control and did not like the City of London as a place where important financial decisions should be taken, suggested that the European Fund for Monetary Cooperation should have been situated here.

Mr. Selwyn Gummer: Surely my hon. Friend has got this wrong. Surely the hon. Member for Stepney (Mr. Shore) is opposed to the fund being in Luxembourg because those living in Luxembourg are not British and the right hon. Gentleman is really opposed to foreigners generally. This is another example of that attitude. Until the right hon. Gentleman starts liking foreigners as human beings, he will not like anything that is going on in Europe.

Sir B. Rhys Williams: That is painfully true. If the right hon. Gentleman heard some of the extremely acid comments of his Socialist brothers in the European Parliament about the refusal of the British Labour Party to take an active part in European affairs, he might be willing to recognise that the stance which he has taken in this House in the past 12 months, of which he is still proud, does him no credit and does not even prove him to be a very fine patriot.

10.45 p.m.

Mr. Anthony Royle: I confess that I have been much enlightened by the interest shown in the order. It is an important order in my view, but all things in life are relative. The importance of the order was underlined by my brief opening remarks. I hope shortly to answer the points raised by the right hon. Member for Stepney (Mr. Shore). It is right that so many hon. Members should have attended the debate to put forward their

views on rather wider issues than are covered by the order.
My hon. and gallant Friend the Member for Lewes (Sir T. Beamish) quite rightly mentioned the importance of the treaties. They are small in comparison with the wider issues affecting Europe at present but it is right that the House should discuss them. He made the point, and it is not for me to comment upon it within the narrow scope of the debate, that membership of the European Parliament enables Members of this House to play an important part in the criticism and development of the Community as a whole.
The hon. Member for Blyth (Mr. Milne) made an important contribution because he underlined a point which has no truth whatever—that the House of Commons has no influence on the order. It has total influence. If the hon. Member wishes, he can divide the House tonight and seek to defeat it. In no way is he giving up his right as the distinguished representative of the people of Blyth to stop this order going through. I assume he would have to gather a few of his hon. Friends together to defeat the order, but that is his right.
The hon. Member also mentioned regional policy. This again goes rather wider than the order, but, once again, this is not being taken out of the control of the House. Whatever happens to regional policy is discussed, debated and initiated by British Ministers responsible to this House. If the hon. Member feels so strongly that my right hon. and hon. Friends are not doing the right thing by regional policy in the Brussels negotiations, he has every right to speak to his right hon. Friend the Opposition Chief Whip and gather his hon. Friends together in an attempt to defeat the Government. He can do this if he feels that the regional policy which is being negotiated is not in the interests of his constituency or of the country. There is no need for me to comment upon the remarks of my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), who made the same point.
Three questions were put to me by the right hon. Member for Stepney strictly in accordance with the order. The first was in connection with the location of


the European Monetary Co-operation Fund. The decision of the representatives of the Governments of member States on 24th July 1973 to site the office of the fund in Luxembourg is provisional, as are the decisions concerning the location of all Community institutions. The situation will be examined in the light of the working of the fund and on the basis of opinions from the Commission at latest by 30th June 1975.
The right hon. Member's remaining two points related to Norway and Finland. He asked whether the order means that the nil tariff will apply at the end of 1983. He is correct in his assumption that it will apply. Secondly, he asked whether he was correct to say that no iron and steel products that were previously free would be brought back into tariff at the end of the period. Again he is correct. Such trade will be free at the end of the period. That answers the right hon. Gentleman's third point.
I am grateful to the right hon. Gentleman and to the hon. Member for Blyth for sparing the time to take part in this important debate tonight and I am grateful also to my hon. Friends who have made contributions.

Question put and agreed to.

Resolved,
That the European Communities (Definition of Treaties) (No. 2) Order 1973, a draft of which was laid before this House on 3rd December, be approved.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hawkins.]

EDUCATION (LEWISHAM)

10.50 p.m.

Mr. J. Selwyn Gommer: With great pleasure I raise this evening the question of the continuing problems of education in Lewisham. Naturally, quite a number of the problems there are under the direct control of the Inner London Education Authority and it would be improper for me to raise those problems here tonight, but I should like to draw the attention of my hon. Friend the Minister to the special problems which arise particularly in my part

of the borough of Lewisham and which are different from those in the rest of London.
London is an area where the size of the school population, particularly the secondary school population, is generally falling, but in Lewisham and certain parts of Wandsworth it is rising and the primary school population also shows a considerable increase. It is therefore likely that there will be continual pressure on the Department to give permission for the extension of existing schools and to establish new ones. It is to ask that the Department should face up to the grave problems which we have that I raise the matter on the Adjournment tonight.
The particular problem which has given rise to this debate is the establishment of the new Lewisham school for which the Department gave permission sometime ago after a considerable campaign by parents and teachers and the then Conservative-controlled ILEA. We were pleased that the King Alfred Girls' School was to be replaced by a new school in my constituency The school has been in two buildings, separated by the South Circular Road. It has grown, and it is an excellent school under the headship of Mrs. Shelton. She has gathered a good staff, all ready for the move to the new school for which the Department has given permission.
Unexpectedly, with no indication to the parents, who came to me for advice, who had chosen to send their children to the new school, it was not opened at the beginning of the new school year, and we have no indication from the Inner London Education Authority whether it will be ready even for next year. It is to that that I ask my hon. Friend to turn his attention.
The King Alfred School was a three-form entry school and the new Lewisham School is to be seven-form entry. For two years the King Alfred School has expanded its intake ready to move into the new premises.
Unfortunately the new premises are not ready, and no notice of this eventuality was given. Until the last moment the people concerned thought that they would be moving into the new buildings in Manwood Road. They have been recruiting pupils and teachers and now find


that they are on two sites, so that a primary school is unable to open for children who desperately need it. This is three miles away from the other two buildings which are still separated by possibly the busiest road in London, the South Circular. One of the buildings now occupied by the King Alfred School is scheduled to be taken over by a primary school. That primary school is fit to burst. We are in grave difficulty in finding enough benches for bottoms, let alone good accommodation and teachers.
When we have a school such as the King Alfred School, which has done so well, with a full complement of staff, even according to the generous staffing allowances of the Inner London area, it is a serious matter for the parents of children who opted to go to that school on the explicit understanding, which I believe my right hon. Friend the Secretary of State also accepted, that the Inner London Education Authority would provide that school in time.
I ask my hon. Friend the Minister to pressure the authority and demand, as the money for the school is forthcoming from the Government, that we get a date for its completion and that that date is before the end of the current school year. Otherwise, we shall have not merely five forms of children trying to work out their time in a primary school but another intake far too big for the present accommodation, which would be totally unacceptable and would do great damage to this growing school.
Let us picture the situation of a parent in my constituency. He or she might ask me "Should I send my child to the new school?" My reaction would be "Of course. It is a first-rate school with a very good headmistress and staff." But then the parent will ask "Will there be a place for my child, in the sense that there will be a desk at which he will sit?" I will be unable to advise him or her to put the child down for the school, because we do not know whether it will open.
The Department has a responsibility to make sure that its money is being spent properly and to find out why the Inner London Education Authority has so far been unable to explain either why the school is so late or what it will do to make sure that the school arrives on time.
This is a specific example of the problems with which we are faced in Lewisham. We are at the bottom of the list in Inner London. Because of our special problems of an expanding school population, because of being right at the edge of the Inner London Education Authority area, we find ourselves always unable to provide the kind of accommodation, teachers and environment that other parts of London can find.
I have asked my hon. Friend and his predecessors to take a special look at the needs of the area of Lewisham, particularly the need for another boys' school. So far the Inner London Education Authority has refused even to make a recommendation to my right hon. Friend. But when it does recommend that there is a need for another secondary school in Lewisham to replace the present Roger Manwood School to set free a building in Kilmorie Road, rebuilt after the war, for primary education, I hope that my right hon. Friend will consider that recommendation with great care.
We in Lewisham have a further problem, which exacerbates the difficulty of actual places. For many years the Inner London Education Authority's figures have, I believe, been inaccurate. The authority has not been able to say how many school places we need. That is why we have a great shortage at both primary and secondary school level. But now, with a general teacher shortage in London, we are in a particular difficulty.
My hon. Friend will no doubt say, and I will agree with him, that the two background facts to the teacher shortage are that, first, over London as a whole there is a better teacher-pupil ratio than in the rest of the country, and, secondly, that the economic climate must be taken into account. Today is an ideal time to mention it. The Government are pointing out that we must face the fact that in many ways stage 3 is the most generous incomes policy we could possibly have because, with the lack of growth which we now face, particularly owing to the industrial action we are experiencing, we shall find it more and more difficult to increase wages. In those circumstances it would obviously be unacceptable to offer the teachers an agreement which was outside phase 3.
I do not ask my hon. Friend to do that. What I ask him to do is to ensure


that the Secretary of State and her colleagues make the best offer which can be made within the terms of phase 3 to the teachers of London. Secondly, I ask him to do all he can to ensure that, when we move into easier times, at the top of the list of priorities shall be means of providing for teachers working in London the opportunity to earn a salary commensurate with the pressures on them and the cost of living in London.
If my hon. Friend did that, it would be right for him also to ask that the ILEA looks at a number of issues which up to now it has failed to face. He can use his influence to ensure that it does so. First, if the pupil-teacher ratio in London as a whole is as good as I believe it to be, it seems odd that it has not been possible to improve the situation in Lewisham, Wandsworth and one or two other areas. The ILEA must look—my hon. Friend must press it to look—at ways of getting teachers to move to these areas within the general catchment area.
Secondly, my hon. Friend must do all he can in consultation with the Minister for Local Government and Development to ensure that local authorities do more in the provision of housing in areas like mine where the possibility of buying a house is considerably diminished by the activities of the local authority. In Lewisham nearly half the units of accommodation are owned by the Lewisham Borough Council or by the Greater London Council.
Therefore, if there is to be housing for teachers, some of it must come from the general stock of local authority housing. Because of pressures which I have led in my constituency, the local authority has given way and provided some housing for teachers. I would hope that by hon. Friend the Under-Secretary could use his influence to ensure that that pressure will be maintained and that we provide more accommodation for teachers in areas of stress such as the southern part of the borough of Lewisham.
Thirdly, my hon. Friend could do much by way of encouragement and circular to get local authorities concerned with education, particularly the ILEA, to face the issue of the size of schools. A school which serves my constiuency,

although it is not in it, has a school population of over 2,000. It is a good school with a good staff and good headmaster. It would be a better school if its size were diminished. Instead, the ILEA suggested that it should be increased—that it should be a school of 2,500 children. That would be an intolerable burden to place on those who organise and run such an establishment.
It is no good the local authority pretending that this is not at the heart of the problem of bringing teachers to London. If we provide them with an environment in which it is almost impossible to teach, we cannot blame them for going to pastures new. If the only educational change which takes place is not the radical change which I should like to occur but the traditional conservative change of insisting on large schools for children aged from 11 to 18, there will be a lowering of the number of teachers who want to come to London.
My hon. Friend the Under-Secretary could do a great deal to help in the matter of discipline in schools. If we have a society in which the schools are unable to provide the atmosphere in which academic or any other work can take place, we do not have a society which easily attracts teachers. My worry is that in many areas of London—Lewisham is by no means the only area—there are schools which could be much better if only their size was right and if only we could find ways of improving the teachers' conditions. I do not mean conditions in the sense of bigger staff rooms and the rest, but conditions in which teachers may teach. What worries me is that they are so often non-existent.
I want to see my right hon. Friend and my hon. Friend set a standard and bring to the notice of those who are concerned with education the need to provide the minimum of discipline which is necessary if there is to be education at all. The reason why I commend to my hon. Friend the special situation in the new Lewisham school is that in the King Alfred School which it will replace I met that fascinating middle way between discipline which was too strict to provide for the natural exuberance of young people and discipline which was too lax to make it possible to teach. It was a relaxed atmosphere without being an atmosphere in


which no work could be done. That is a great tribute to the staff who worked in very difficult circumstances.
Finally, I ask my hon. Friend to bring his influence to bear upon the ILEA in considering plans for the recruitment of teachers in Lewisham and, above all, to bring home to the ILEA that, if we are to solve the continuing problems of education in Lewisham, we must look at the facts on the ground rather than at the educational theories which so often inform those who make policy at County Hall. This is an area of racial and social mixture in which many young people start with the great disadvantage of a deprived home.
The activities of my right hon. Friend the Secretary of State mean that in this area there will be pre-primary education of a kind we have never dreamed of before and that primary schools are being replaced. I ask my hon. Friend the Under-Secretary to match that with secondary school provision that is sufficient to meet the genuine aspirations of the young people of Lewisham and a teacher supply that makes it possible for them properly to be taught in an area where education means so much.
Many parents in my constituency have moved there because they wish to give their children an education which they themselves were not fortunate enough to receive. It is to those parents that my hon. Friend must address himself. They ask him to use his influence to see that the ILEA ceases to treat my borough, and particularly my bit of the borough, as the Cinderella of London's education and faces the special problems of an area where the numbers on the school rolls are rising so fast.

11.8 p.m.

The Under-Secretary of State for Education and Science (Mr. Timothy Raison): In listening to my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) I had a sense of déjà vu because, as he will recall, it is not many years since he and I were both members of the ILEA Education Committee. I happened to be on what passed for a front bench and he was in a comparable position to his present one. I learned then what an eloquent advocate he was of the needs of education in Lewisham.
Small as is the attendance here this evening, those who are present cannot help but be impressed by the fervour with which my hon. Friend has spoken on behalf of the children in his part of London. He has always taken an outstanding interest in what happens in the schools in Lewisham, and I am sure that in time the children will look back with gratitude at what he has contributed.
My hon. Friend has asked my Department to face several important problems. I here introduce a theme which will have to recur again in saying that most of the things my hon. Friend has talked about are fundamentally for the ILEA, as he himself acknowledged. However, the Government have this relationship with all education authorities and we will follow closely and sympathetically the various points my hon. Friend has raised in so far as it is within our power to do so. He can certainly count on my personal sympathy for what he has said.
I recall the days when I was on the ILEA Education Committee, hearing about and visiting the King Alfred Girls' School, to which my hon. Friend has paid an apt tribute. As he implied, this project is in the starts programme, so in a sense the Department has done its bit. I have not had the time or the opportunity to look into the details of why the new Lewisham building project should have been delayed. In fairness, however, I must point out that there is one aspect which comes within our responsibility—the building situation generally. I should be surprised if that has not contributed to the delay.
Even before today's economic announcements, we had taken steps to try to get rid of some of the great pressure which has built up on the building industry, and I hope we shall see the consequences in an easing of the position in those schemes which are under way or are meant to be under way. I hope we have done something which will help in this respect, but I will look more closely at the details of the case.
I will also inquire into the more general point my hon. Friend raised about the future needs of Lewisham in education and the question of an additional boys' school. But the recommendation that there should be a new boys' school in Lewisham, if it be the right thing, must


come from the ILEA, and it is not proper or desirable that the Department should usurp the functions of education authorities in this respect. But I will look into that matter also.
Naturally, and almost inevitably, my hon. Friend referred to the vexed question of supply of teachers in London, particularly in areas like his own. We have heard a lot about this during the last few weeks, and rightly so. We all recognise that the supply of teachers is the crux of good teaching. Everyone would like to see an increase in the pay of a great many professions, and teaching is no exception. I am grateful to my hon. Friend for his clear realisation that whatever can be done has to be done within the framework of stage 3. If we breach stage 3, we merely let loose inflation and all those things which have brought us to our present difficulties.
I have no doubt that my right hon. Friend the Secretary of State will note what my hon. Friend has said about the best possible offer that can be made under stage 3. This is primarily a matter for negotiations within the Burnham Committee and there are set procedures for it, but I am sure my hon. Friend's words will have been noted.
I also have no doubt that what my hon. Friend said about special measures which might help to get teachers into areas like Lewisham have been much discussed in education recently. Questions like the possible provision of special housing for teachers is one which London boroughs have been looking at closely, and it is right and proper that they should.
My hon. Friend mentioned yet another subject of great importance—the size of school and the great bearing this can have on the quality both of the formal education and the discipline or environment—whatever one likes to call it—prevailing within any school. There is no doubt that there has been something of a change of heart or change of mind in London on this topic.
My hon. Friend will recall that when we were both serving on the ILEA, the received doctrine of those days was that schools should be very big and that comprehensive schools needed to be very big

and all-through 11-to-18 schools. A number of members on the Tory side of the authority tried to see whether the doctrine was capable of a little modification, because even then we did not believe that it was the best education gospel. But it proved a difficult job.
It must have been of great interest to my hon. Friend, and to many others who were at that time concerned in London education, that the ILEA itself put forward proposals recently relating to North and North-West London acknowledging that schools did not have to be very big if they were to work effectively as comprehensive schools. In place of the old notion that 2,000 or more children were necessary to produce a viable comprehensive school, the ILEA is now talking of 750 or thereabouts. What is more, my right hon. Friend has made the point repeatedly that she believes that size can be excessive, and she will have followed this new development with great interest.
The corollary is that it is necessary to look afresh at sixth form provision, but the proposals put forward by the ILEA about more flexible ways of providing good quality sixth form teaching are of great interest to the education community, and they strike a sympathetic response in my own heart. We welcome the fresh thinking that is going into how to provide comprehensive education which matches the quality desired.
It is not unreasonable to say that the comprehensive argument is moving from the doctrinal, theological state of a few years ago to a more healthy state where we can look at practical problems of how to make schools work effectively without thinking constantly in terms of very loose principles.
I endorse what my hon. Friend said about discipline. Again, what happens inside the schools is primarily a matter for the education authorities, especially for head teachers and staff, with the support of the governors and so on. Very few people want to see the Department of Education and Science excessively interventionist in these matters. We have a great tradition of putting our trust in our head teachers and staffs. But we are bound in the Department to be aware that there is a great deal of concern throughout the country. We share it, and


we have been thinking hard as have outside bodies, about these vexed questions of violence, truancy and so on. My hon. Friend's words evoke a sympathetic response on my part.
The schools of Inner London labour under great difficulties. We are doing a good bit nationally to try to help in terms of the special provision that we can give to deprived areas, and I am committed totally to this kind of approach. But that is only part of the story. It will need continuing effort and continuing reinforcment.
We ought also to remind ourselves that, as well as the difficulties of schools and the black or grey spots, there are some bright spots. There are teachers in

London who are doing a magnificent job. Whatever criticisms we may make of some aspects of London education and the response of some teachers to the relative teacher shortage in recent times, I still retain from my ILEA days a deep sense of affection for London education and the belief that most of those in it are deeply dedicated to the children whom they serve.
I congratulate my hon. Friend on raising this important topic, albeit at rather short notice. We shall take very much to heart the points to which he has drawn attention.

Question put and agreed to.

Adjourned accordingly at nineteen minutes past Eleven o'clock.